Court File and Parties
DIVISIONAL COURT FILE NO.: 556/14
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
YAROSLAW ROMAN BOTIUK
Plaintiff
(Respondent in Appeal)
– and –
DAVID CAMPBELL, AS TRUSTEE OF THE ESTATE OF WALTER GEORGE DANYLIW aka W. GEORGE DANYLIW aka WOLODYMYR GEORGE DANYLIW aka WOLODYMYR JURIJ DANYLIW, DECEASED, FRANCES DANYLIW aka FRANCES SIRMACHESKY, CLAIREVILLE HOLDINGS LIMITED, Z.W.D. DEVELOPMENTS LIMITED, 802158 ONTARIO LIMITED, URBAN & COUNTRY DEVELOPMENTS LIMITED, URBAN & COUNTRY TRANSPORT LIMITED, ANDREA DANYLIW and ANDREW DANYLIW
Defendants
(Appellants)
John Longo, for the Plaintiff/(Respondent in Appeal)
J. T. Curry, for the Defendants/Appellants (Moving Parties)
HEARD at Toronto: January 23, 2015
Nature of the Proceeding
1The moving party seeks leave to appeal from the decision of the Corbett J. wherein he exercised his discretion to issue certificates of pending litigation against the title of various properties owned by the Defendants.
2The Plaintiff sued Walter Danyliw and others for defamation in 1978. He succeeded at trial, recovered significant damages and interest and the decision was upheld in the Court of Appeal and the Supreme Court of Canada. Nothing has been paid on the judgment and the balance owing at the present time exceeds $5million.
3In April of 2004, the Plaintiff commenced this proceeding in the Superior Court alleging that various properties owned by Mr. Danyliw had been conveyed fraudulently or put in trust to avoid creditors. As such, he sought to have the conveyances set aside or to have declarations that the properties were actually the properties of Mr. Danyliw such that they could be available to the Plaintiff to collect his judgment from.
4While the April 2004 Statement of Claim contained a request for certificates of litigation, the Plaintiff did not pursue that request when he issued the claim. Instead, he registered notices against the various properties owned by the Defendants under the Land Titles Act.
5Corbett J. expunged the notices, but ordered that they be replaced with either security agreed between the parties, or by a certificate (or certificates) of pending litigation on terms and over the properties agreed between the parties or as directed by him.
6On this motion, the Defendants submit that there is good reason to doubt the correctness of the learned motion judge’s decision because he failed to apply the applicable test in awarding certificates of pending litigation in this context and because he erred in his consideration of the equities.
7The Defendants also argued that the proposed appeal raised issues of such importance that leave should be granted, as it was desirable that the Divisional Court clarify the law and resolve which legal test should apply when a certificate of pending litigation is being sought in a fraudulent conveyance action. Further, the Defendants submit if the motion judge’s order is allowed to stand, it will create an incentive for parties to unilaterally register notices on title as a means of subsequently obtaining alternative relief that they might not otherwise be entitled to.
8For the reasons that follow, I would dismiss the motion. In doing so, I find that the motion judge did apply the correct legal test for obtaining a certificate of pending litigation in the situation before him, a test that has recently been addressed by the Divisional Court. Further, I find that the motion judge considered and weighed the equities of granting versus refusing certificates of pending litigation in the case before him, did not misapprehend the evidence when he did so and made no error of law or principle. As such, his decision on the equities is entitled to considerable deference.
The Test for Granting Leave to Appeal
9Rule 62.02(4) of the Rules of Civil Procedure, R.R.O., Reg. 194 lays out the test for granting leave to appeal. Leave 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.
The Motion Judge’s Decision
10The motion judge reviewed the evidence before him and came to the conclusion that “there is a good arguable case that Mr. Dayliw had very substantial assets, including interests in the corporate [defendants], and that the trust and other arrangements alleged to govern these assets are susceptible to the attack mounted against them by [the plaintiff].” (Motion Judge’s Reasons, para. 7)
11He then reviewed the equities for and against granting the certificates of litigation. In doing so, he found that the Plaintiff’s actions in registering notices under the Land Titles Act without disclosing them to the Defendants immediately after he registered them counted against him. He also examined the Plaintiff’s delay in seeking relief in the form of certificates of litigation. He then turned to the issue of prejudice and found that the properties in question were investment properties and that there was no evidence that registering certificates of litigation at this time would work an unfairness on the Defendants. On the other hand, the motion judge found that if the certificates were not granted, the Plaintiff may never be successful in collecting the judgment he had been trying to collect for many years.
12When it came to the question of actually ordering that certificates be registered, the motion judge stated:
11There is an impediment to an appropriately tailored order. It is not clear that the merits of Mr. Botiuk’s claim are equally strong in respect to each of the applicants and each of the subject properties. If restricted security is provided over selected properties, Mr. Botiuk may find himself in difficulties if it turns out that the secured properties are ones in respect to which his claims fail, while the meritorious claims are unsecured. The court cannot presuppose unity of interest among the applicants such that security of a certificate of pending litigation on one property can properly serve as security for all of Mr. Botiuk’s claims. The parties are represented by excellent and experienced counsel: if there is reasonable cooperation I would hope that an appropriately tailored order for security could be devised.
12In summary, then, order to go that the impugned notices be expunged from title to be replaced simultaneously with either (a) security satisfactory to all parties, or if the parties cannot agree upon appropriate security, (b) a certificate or certificates of pending litigation on terms and over properties agreed between the parties or, failing agreement, directed by this court.
13Suffice it to say that, thus far, the parties have not been able to agree upon appropriate security or what certificates of litigation should be registered over which properties. Given the disposition of this motion, if they still do not agree, they will have to return to the motion judge for further direction.
Analysis
14Normally, in order to obtain a certificate of pending litigation, a party must establish that there is a triable issue with respect to that party having a reasonable claim to an interest in land. (G.P.I. Greenfield Pioneer Inc. v. Moore (2002), 111 A.C.W.S. (3d) 356 (Ont. C.A.)
15There is no dispute that the Plaintiff in this case has no claim to an interest in land. However, the Divisional Court has recently stated that a certificate of pending litigation is “available when a claim of fraudulent conveyance is made by a creditor, provided that the creditor shows that there is a triable issue respecting the fraudulent nature of the conveyance.” (York University v. Markicevic, 2014 ONSC 3227 (Ont. Div. Ct.), at para. 8)
16In this case, the motion judge did find that that there was a triable issue respecting the fraudulent nature of the conveyances at issue. In doing so, he may have used different language, but the import of that language is clear.
17On the motion before me, the Defendants pointed to the line of authority stemming from a case called Grefford v. Fielding (2004), 2004 8709 (ON SC), 70 O.R.(3d) 371 (SCJ) and submitted that the failure to apply the test in Grefford “constitutes good reason to doubt the correctness of the Learned Motion Judge’s decision.” (Defendants’ Factum, para. 27)
18With respect, the Grefford test is a test that applies when the plaintiff has not yet obtained judgment in the underlying action. In this case, the Plaintiff has obtained judgment against Mr. Danyliw and, thus, the applicable test is the one set out in York University.
19York University also establishes that after finding that there is a triable issue respecting the fraudulent nature of the conveyance, the motion judge must then go on to weigh the equities for and against granting a certificate of pending litigation. This is exactly what the motion judge in this case did and, as stated, I can find no misapprehension of the evidence or error in law or principle in his analysis of the equities. As such, his decision on this part of the test is entitled to considerable deference as it is a discretionary one.
Conclusion
20For these reasons, I find that the motion judge’s decision is not open to serious debate and that the issues raised on this appeal are not issues of such importance that leave to appeal ought to be granted. To the extent that issues exist, they are issues that do not transcend the interests of the parties. Further, I find that this is not an area of the law where there are conflicting decisions that the Divisional Court needs to clarify. The Divisional Court has just recently addressed the issue and articulated the test applicable in the situation at bar, a test that the motion judge applied.
21For these reasons, the motion is dismissed. In this event, the parties agreed that the Plaintiff should be awarded his costs of this motion, fixed in the amount of $6500.00, all inclusive. It is so ordered.
H. SACHS J.
Released: 20150202
CITATION: Botiuk v. Campbell, 2015 ONSC 694
DIVISIONAL COURT FILE NO.: 556/14
COURT FILE NO.: 04-CV-266496 CM1
DATE: 20150202
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
YAROSLAW ROMAN BOTIUK
Plaintiff
(Respondent in Appeal)
– and –
DAVID CAMPBELL, AS TRUSTEE OF THE ESTATE OF WALTER GEORGE DANYLIW aka W. GEORGE DANYLIW aka WOLODYMYR GEORGE DANYLIW aka WOLODYMYR JURIJ DANYLIW, DECEASED, FRANCES DANYLIW aka FRANCES SIRMACHESKY, CLAIREVILLE HOLDINGS LIMITED, Z.W.D. DEVELOPMENTS LIMITED, 802158 ONTARIO LIMITED, URBAN & COUNTRY DEVELOPMENTS LIMITED, URBAN & COUNTRY TRANSPORT LIMITED, ANDREA DANYLIW and ANDREW DANYLIW
Defendants
(Appellants)
REASONS FOR JUDGMENT
H. SACHS J.
Released: 20150202