CITATION: Adler v. Adler 2016 ONSC 5245
DIVISIONAL COURT FILE NO.: 199/16
DATE: 20160818
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: CINDY ADLER v. KERRY ADLER
BEFORE: NORDHEIMER J.
COUNSEL: M. McCarthy & S. Young, for the moving party/respondent
H. Niman & D. Wowk, for the responding party/applicant (leave to appeal)
D. Wowk & S. Yuen, for the responding party/applicant (stay motion)
HEARD at Toronto: August 17, 2016 (stay motion); written submissions (leave to appeal)
E N D O R S E M E N T
[1] The moving party/husband, Kerry Adler, seeks leave to appeal from the decision of Kiteley J. dated April 12, 2016. Coincidentally, at the same time as I received the motion for leave to appeal in writing, I was scheduled to hear a stay motion also brought by the moving party. This endorsement therefore deals with both of these motions.
Leave to appeal
[2] The motions judge made an order pursuant to ss. 12 and 40 of the Family Law Act, R.S.O. 1990, c. F.3, that restrained the moving party from transferring, encumbering, dissipating or depleting certain of his assets. The motions judge also required the moving party to place a certificate of pending litigation on a particular property and to post a letter of credit or bond in the amount of $4 million to be held on account of the claims made by the responding party in this litigation. All of this arises in the context of this family litigation in which the responding party makes claims for equalization and support.
[3] There are essentially two grounds upon which the moving party seeks leave to appeal. One is that the motions judge did not apply the appropriate legal test in determining whether orders under ss. 12 and 40 of the FLA ought to be made. The other is that the responding party had not specifically sought either a certificate of pending litigation or a letter of credit and, consequently, the moving party was not given fair notice that either of those forms of relief would be granted and a proper opportunity to respond.
[4] In order to obtain leave to appeal, a moving party must satisfy one of the two tests set out in r. 62.02(4) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, that reads:
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.
[5] Lengthy facta and voluminous material have been filed on this motion. However, notwithstanding the amount of material filed, I do not intend to engage in an extended analysis of the issues raised or to write lengthy reasons for my conclusions. I note, in passing on this point, that the Divisional Court appears to be the only court that is required to give reasons for granting leave to appeal: see r. 62.02(7) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Neither the Supreme Court of Canada nor the Court of Appeal have any such requirement and neither court generally provides reasons for granting or refusing leave to appeal. It is not clear to me why the Divisional Court is treated differently in this respect but the fact that it is does not carry with it any requirement that the reasons be extensive or exhaustive. Indeed, I note that r. 62.02(7) refers expressly to the judge giving “brief” reasons. Further, it is my experience, and that of many of my colleagues, that when lengthy reasons are given for granting leave to appeal, they may actually serve to complicate the hearing of the appeal by providing yet another, often competing, view on the underlying issues. In my view, the reasons should address the issue of whether either of the tests for leave to appeal have been met and nothing more (save, where necessary, setting out the precise issues for which leave to appeal has been granted).
[6] In terms of the first test for leave to appeal, the moving party has failed to satisfy me that the decision of the motions judge is in conflict with other decisions on a matter of principle. The motions judge was satisfied, for the reasons that she gave, that an order under ss. 12 and 40 was necessary to protect the interests of the responding party. The motions judge pointed out that:
(a) the responding party may be entitled to a significant payment in the many millions of dollars;
(b) there has been, over the past few years, a serious depletion in the value of the assets of the moving party;
(c) many of the moving party’s assets were located outside Canada;
(d) the moving party had conducted himself in the course of this litigation in a manner that suggested that he was attempting to obstruct and delay the trial of the issues.
[7] The moving party has failed to point to any case that could be fairly said to conflict, on a matter of principle, with the analysis undertaken by the motions judge. This reality is perhaps driven by the fact that the decision of the motions judge turns very much on the particular facts of this case and not by any complicated analysis of the legal principles to be applied.
[8] On this point, the moving party latches onto a statement that appears early in the motions judge’s endorsement where she said:
It is not possible nor is it necessary for me to make findings of fact or of credibility in a record as complex as this in the context of a motion for a temporary order.
The moving party then criticizes the motions judge for subsequently making findings of fact and suggests that the conflict between the statement and the factual findings demonstrates error.
[9] I do not agree. The preliminary comment made by the motions judge was clearly directed at not making ultimate findings of fact or credibility that are properly left to be determined at trial. That perfectly fair observation did not mean, and did not preclude, the motions judge from making some findings that were relevant to the issue to be determined by her. In making many of these findings, the motions judge made it clear that they were provisional in nature given the current state of the proceedings. The motions judge was, however, required to make some determination as to whether the responding party might achieve a significant recovery in order to properly assess the basis for the order being sought.
[10] Having failed to demonstrate a conflict between the decision here and other authorities, the first test for leave to appeal is not met.
[11] In terms of the second test for leave to appeal, the moving party must demonstrate that there is good reason to doubt the correctness of the decision. In considering this test, it may be helpful to set out the precise language of ss. 12 and 40 of the FLA:
- In an application under section 7 or 10, if the court considers it necessary for the protection of the other spouse’s interests under this Part, the court may make an interim or final order,
(a) restraining the depletion of a spouse’s property; and
(b) for the possession, delivering up, safekeeping and preservation of the property.
- The court may, on application, make an interim or final order restraining the depletion of a spouse’s property that would impair or defeat a claim under this Part.
[12] I am not satisfied that there is any good reason to doubt the correctness of the decision in terms of the basic relief granted, that is, the restrictions on the moving party’s right to deal with certain of his property. As I have explained above, the motions judge set out a proper basis for determining that such relief was warranted in order to protect the responding party’s interests.
[13] Two other issues arise under this test, however. One is the granting of a certificate of pending litigation and the other is the order for the posting of a bond or letter of credit, both of which were ordered without any specific request for that relief emanating from the responding party in her motion.
[14] The moving party says that there is good reason to doubt the correctness of the motions judge’s order in both of these respects because the relief was not expressly requested. The moving party says that he was caught off guard by the granting of this relief and did not have a proper opportunity to respond to it because of the lack of notice. The moving party says that this process was procedurally unfair.
[15] Granting relief that is not expressly requested by a party is always problematic. It is less problematic, however, when the form of relief granted is one that a party should reasonably appreciate is likely to be considered as a necessary head of relief given the issues that are in play. In that regard, I do not accept that the granting of a certificate of pending litigation is fairly characterized as a form of relief that might catch a party off-guard. Both sections refer to restraining the depletion of property. Further, s. 12 refers to the “safekeeping and preservation” of property. A certificate of pending litigation is designed for precisely those purposes. It ought not to have come to anyone’s surprise, especially parties represented by senior and experienced counsel, that a certificate of pending litigation might be resorted to by the court in order to achieve the goal of non-depletion of property, whether a certificate is expressly requested or not.
[16] However, the ordering of a bond or letter of credit is, in my view, a different matter. For one, it is not clear to me that a bond or letter of credit fits comfortably, either within the notion of restraining the depletion of property or within the notion of safekeeping and preservation of property. Rather, an order requiring a bond or letter of credit seems to direct the creation of a new asset or new piece of property, neither of which appears to be contemplated by the plain wording of either s. 12 or s. 40. I would also note that it is of some concern on this point that there was no evidence before the motions judge as to whether the moving party could obtain such a bond or letter of credit, and, if so, at what cost to him or at what impact on his available assets.
[17] In any event, it is well-established that in considering whether there is good reason to doubt the correctness of an order, I do not have to conclude that the order is wrong: see, for example, Ash v. Lloyd's Corp., [1992] O.J. No. 894 (Gen. Div.) at para. 2. Rather, I must only conclude that there is an issue about its correctness that needs to be determined. Applying that test, I am satisfied that there is good reason to doubt the correctness of the order on this one aspect. I will add to that observation that I am also satisfied that this issue involves matters of sufficient importance that leave to appeal ought to be granted. This is an issue that has province-wide impact and a determination ought to be made whether the sections authorize such relief or not.
[18] Consequently, the motion for leave to appeal is granted but restricted to the issue whether ss. 12 and 40 (or either of them) empower the court to order the posting of a bond or letter of credit where the requirements for relief in the sections are otherwise met. I fix the costs of the motion for leave to appeal in the amount of $10,000 but leave the determination of which of the parties, if either, should receive those costs, to the panel hearing the appeal.
Motion for stay
[19] Given my decision regarding leave to appeal, this motion can be disposed of relatively briefly.
[20] The only aspect of Kiteley J.’s order that is now in issue is the requirement to post a bond or letter of credit. I can see no reason to require the moving party to post that bond or letter of credit until the issue, whether there is jurisdiction to order it, is determined. There is prejudice to the moving party from having to obtain the bond or letter of credit, including the costs associated with doing so. There is also an element of prejudice to the moving party from the fact that the responding party has already brought a motion to strike his pleadings for his alleged failure to comply with the order of Kiteley J. At the same time, there is little prejudice to the responding party. She is not in a position at this stage to draw on any bond or letter of credit that might be required. If the jurisdiction to post the bond or letter of credit is established, then it can still be provided by the moving party, only at a later date. If the jurisdiction does not exist, then the moving party had no right to the bond or letter of credit in the first place.
[21] I am satisfied, therefore, that an order should go staying paragraph seven of Kiteley J.’s order dated April 12, 2016 until the appeal is heard and determined.
[22] Given the very limited success on this motion, I make no order as to costs.
NORDHEIMER J.
DATE: August 18, 2016