Court File and Parties
CITATION: Belchevski v. Dziemianko, 2015 ONSC 2360 DIVISIONAL COURT FILE NO.: 609/14 DATE: 20150414
SUPERIOR COURT OF JUSTICE – ONTARIO DIVISIONAL COURT
RE: DRAGICA BELCHEVSKI AS ESTATE TRUSTEE FOR THE ESTATE OF SPASIJA LAPAJKOSKI and DRAGICA BELCHEVSKI AS ESTATE TRUSTEE FOR THE ESTATE OF STOJAN LAPAJKOSKI, Applicants/Appellants AND: MILKA DZIEMIANKO, Respondent
BEFORE: Lederer J.
COUNSEL: Ali Mian, for the Applicants/Appellants No one appeared for the Respondent
HEARD at Toronto: April 2, 2015
ENDORSEMENT
[1] Madam Justice Chiappetta ordered that the house that had been the home of Stojan Lapajkoski and his wife, Spasija, be sold and the net proceeds divided equally between Stojan and his daughter, the respondent, Milka Dziemianko. At the time the order was made, Spasija had died. Since the order was made, Stojan has also passed away. The estates of both are represented by another of their daughters, Dragica Belchevski, who is the estate trustee of both.
[2] The two estates seek to appeal the order but only insofar as it divides the proceeds. The two estates accept that the house should be sold. The Amended Notice of Appeal to the Divisional Court asks that Milka Dziemianko be awarded only a one-third interest in the proceeds of the sale, either as a tenant-in-common with her father (now his estate) owning the other two-thirds, or with the estate of her mother and her father each owning one-third.
[3] Counsel is uncertain as to whether the appeal should be brought to this court or to the Court of Appeal. Which has jurisdiction to hear the appeal? In order to protect the position of the appellants, appeals have been launched in both courts. Where should the appeal be heard?
[4] The Partition Act, R.S.O. 1990 Ch. P.4 provides the Superior Court with the jurisdiction to order the sale of land. Section 3(1) states:
Any person interested in land in Ontario, or the guardian of a minor entitled to the immediate possession of an estate therein, may bring an action or make an application for the partition of such land or for the sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested.
[5] Section 1(1) explains that “court” means the Superior Court of Justice.
[6] Section 7 provides that:
An appeal lies to the Divisional Court from any order made under this Act.
[7] As counsel sees it, the problem is that neither party wishes to question the order compelling the sale. It is the distribution of the proceeds of the sale that is the concern. The factual foundation for the issue of distribution began with the desire of Stojan and Spasija to provide for an inheritance for each of their three daughters: Milka (the respondent), Dragica (the Estate Trustee) and Lubija. They decided that their home should be left to Milka. The other two daughters were otherwise provided for. Milka and her husband moved into the house to live with Stojan and Spasija. Some years later, with the assistance and advice of a lawyer, Stojan and Spasija transferred a one-half interest in the house to Milka to hold with them as joint tenants. The validity of that transfer was an issue in the proceeding conducted by Madam Justice Chiappetta.
[8] Subsequent to the transfer, the relationship between Milka and her parents broke down. Stojan and Spasija left the home and went to live with Dragica. The relationship between Milka and her parents became irreparably damaged. Relying on Powers of Attorney which named her as a substitute attorney for both of her parents, in each case in substitution for the other parent who was the primary attorney, Milka arranged the transfer of legal title to the house to herself with a declaration of trust that confirmed that her parents remained the beneficial owners of their one-half interest. The impact of this transfer on the joint tenancy was also an issue before Madam Justice Chiappetta.
[9] On December 10, 2012, Stojan and Spasija commenced an application seeking a declaration that they were the sole legal and beneficial owners of the home and an order vesting ownership of the property in their names as joint tenants. On September 9, 2013, Milka commenced an application for a declaration that she is the owner of the house and an order for partition and/or sale. These are the proceedings that came before Madam Justice Chiappetta.
[10] She determined that there was sufficient evidence to conclude that the true intention of Stojan and Spasija was to transfer the interest in their home to Milka as a joint tenant as a complete and unconditional gift. Moreover, the transfer of title undertaken by Milka relying on the power of attorney did not alter the beneficial interest of her parents in the home or the right of survivorship. It is on that basis that Madam Justice Chiappetta determined that “...the home is to be sold and the net proceeds divided equally between Stojan (who was still alive at the time) and Milka.
[11] Absent the order to sell and its concomitant reliance on the Partition Act, the determination of rights to an interest in the home would not be subject to appeal to the Divisional Court. Rather, the matter would proceed to the Court of Appeal pursuant to s. 6(1)(b) of the Courts of Justice Act:
An appeal lies to the Court of Appeal from,
(a) . . .
(b) a final order of a judge of the Superior Court of Justice, except an order referred to in clause 19(1) or an order from which an appeal lies to the Divisional Court under another Act.
[12] Clause 19(1) of the Courts of Justice Act does not apply. As already noted, there is the possibility of an appeal to the Divisional Court under s. 7 of the Partition Act. Does it still govern given the absence of any concern being raised as to the order requiring that the home be sold?
[13] Counsel seeks a ruling as to whether this court or the Court of Appeal has jurisdiction. I confess to some concern. No one appeared for the responding party which, it would seem, acknowledged the issue but chose not to take a position. Counsel for the appellant, similarly, does not appear to be strongly committed to one view or the other. No factum was filed. They just want to know where they are supposed to go. There is a problem. It is not for lawyers to figuratively (or literally) throw up their hands and ask the court to tell them what to do. In this case, counsel seeks a declaration as to which is the appropriate court. “Declaratory orders are in the discretion of the court.[^1] The court’s discretion to make a declaration should be exercised sparingly and with extreme caution.”[^2]
[14] In the normal course, one would anticipate that counsel would make the effort necessary to come to a position and be prepared to defend it if subjected to a motion to quash or questioned by the judge or panel. The court relies on counsel to raise the issue, set the context, introduce the applicable law and take a position all to assist in developing a considered and reasoned decision. In this case, the problem is exacerbated by the fact that there is, as yet, no signed order reflecting the decision of Madam Justice Chiappetta. The parties each proposed a draft. They could not agree and, to this point, have not had the order settled. Both drafts contain a one-sentence paragraph which orders the property be sold and the proceeds divided equally between Stojan and Milka.[^3]
[15] In the circumstances, I will not issue a declaratory order. With some misgivings, I will consider whether the appeal should be quashed for lack of jurisdiction.
[16] On its face, it would seem that s. 6(2) of the Courts of Justice Act provides an answer. It says:
The Court of Appeal has jurisdiction to hear and determine an appeal that lies to the Divisional Court or the Superior Court of Justice if an appeal in the same proceeding lies to and is taken to the Court of Appeal.
[17] Where there are two appeals arising from the same proceeding, one directed to the Divisional Court and the other to the Court of Appeal, it is the Court of Appeal that has jurisdiction to hear them both. In such circumstances, I would not quash this appeal but direct that it be transferred to the Court of Appeal where I anticipate the two proceedings would be consolidated.
[18] As it is, I do not accept that this is the appropriate resolution. As I see it, counsel has not framed the issue properly. It may be that the appellants (the two estates) do not object to a sale taking place, but they do object to the sale as ordered. They object based on the distribution of the proceeds, which is a condition of the sale and an integral part of the order that the property be sold.
[19] In Punit v. Punit[^4], the Court of Appeal considered a similar problem. An appeal was taken to the Court of Appeal from an order for the sale of the matrimonial home. The issue was whether the motion judge had erred in ordering the sale, before trial, without considering whether the sale would prejudice the rights of the wife (the appellant) under the Family Law Act. Ultimately, the appeal was granted but, first, the Court of Appeal considered whether it had jurisdiction. It found that it did not. The matter should have been before the Divisional Court under the jurisdiction provided by s. 7 of the Partition Act (see: para. [6], above). The Court of Appeal made clear that, in the normal course, the matter would have been transferred to the Divisional Court, but in the “exceptional circumstance” where the trial of the matrimonial matter had been set for six weeks after the appeal was to be heard, the Chief Justice of the Superior Court had designated the three Court of Appeal judges as a panel of the Divisional Court. The panel sat as the Divisional Court.
[20] Section 6(2) of the Courts of Justice Act was raised, but the court concluded that it did not give the Court of Appeal jurisdiction because the only matter under appeal was the order for sale under the Partition Act:
The sale order expressly states that it is pursuant to the Partition Act. This is the only provision of the order from which the appellant appeals. We conclude that an appeal from an order of the motions judge lies to the Divisional Court pursuant to s. 7 of the Partition Act. This appeal was brought to the wrong court.[^5]
[21] The situation in this case is the same. The draft orders do not refer to the Partition Act; however, the reasons of Madam Justice Chiappetta make clear that the application brought by Milka, and considered by her, “sought an order for partition and/or sale of the home”.[^6] The reasons (as do the two draft orders) order the sale and the distribution as one provision of its “Disposition”. Under the order, the proceeds are to be divided in half. To distribute the proceeds on a different basis would change the order that is being appealed, an order made under the Partition Act.
[22] Accordingly, I would not quash the appeal. The matter belongs in, and should be heard by, the Divisional Court.
[23] I caution counsel that a panel of the court is unlikely to consider this appeal in the absence of an order that has been signed and entered.
LEDERER J.
Date: 20150414
[^1]: Morden and Perell, The Law of Civil Procedure in Ontario, Second Edition, LexisNexis Canada Inc. 2014, at para. 4.397, referring to CTV Television Network Ltd. v. Kostenuk, 1972 435 (ON CA), [1972] O.J. No. 1858, [1972] 3 O.R. 338, at para. 5. [^2]: Ibid, (The Law of Civil Procedure in Ontario, Second Edition) referring to Re Lockyer, 1933 137 (ON CA), [1933] O.J. No. 395, [1934] O.R. 22 (Ont. C.A.) The case dealt with a request by the Applicant that it be identified as a beneficiary where the name used in the will was not its own. The court refused to deal with the matter because there was no assurance that, when it came time to collect, there would be anything remaining in the estate. The court would not deal with the matter where there might be no purpose in doing so. The situation was quite different, but the principal that declaration should be granted sparingly continues to apply. [^3]: In this regard, one draft order says: THIS COURT FURTHER ORDERS that the Property is to be sold and the net proceeds divided equally between Mr. Lapajkoski and the Respondent. And the other: THIS COURT ORDERS that the House is to be sold and the net proceeds of sale are to be divided equally between Milka Dziemianko and Stojan Lapajkoski, as joint tenants. [^4]: [2014] O.J. No. 1532, 2104 ONCA 252, 238 A.C.W.S. (3d) 870. [^5]: Ibid, at para. 18. [^6]: Belchevski v. Milka Dziemianko (Decision of Madam Justice Chiappetta), 2014 ONSC 6353, at para. 11.