Court of Appeal for Ontario

Citation: Davydov v. Kondrasheva, 2012 ONCA 488 Date: 20120706 Docket: C55040

Judges: O’Connor A.C.J.O., MacPherson and Rouleau JJ.A.

Between:

Igor Davydov Appellant (Respondent)

and

Marianna Kondrasheva Respondent (Applicant)

Counsel: Igor Davydov, in person Alexandra Abramian and Brigitta Tseitlin, for the respondent

Heard: July 4, 2012

On appeal from the order of Justice John P.L. McDermot of the Superior Court of Justice, dated January 27, 2012.

Endorsement

[1] This is an appeal from the motion judge’s order finding the appellant in contempt of a non-dissipation order issued in a matrimonial proceeding. Non-dissipation orders find their origin in sections 12 and 40 of the Family Law Act, RSO 1990, c F.3.

[2] Section 12 provides as follows:

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.

[3] Section 40 provides that:

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.

[4] The appellant was born in Russia and, after spending two years in Israel, immigrated to Canada in 1993. The parties were married in Russia in October 2005 and separated in early 2011.

[5] An application for relief under the Family Law Act issued on March 16, 2011. On March 23, 2011, the applicant and her counsel attended before McGee J. in order to obtain a number of orders including exclusive possession of the matrimonial home, spousal support of $5,000 per month and an order that the respondent pay all expenses on the home. McGee J. dismissed the motion for lack of notice but made an order that “neither party is to dissipate assets until further order or written agreement.”

[6] The respondent brought a motion for contempt of the non-dissipation order of Justice McGee. The motion judge gave the Appellant 60 days to purge his contempt by payment of $723,999.12.

[7] In response to the motion for contempt, the appellant conceded that he was aware that a non-dissipation order had been made and that, after the order was made, he transferred $780,502.73 to an account in Cyprus. The appellant explained that these funds were used to partially repay a legitimate debt he had incurred prior to the date of separation. In his affidavit filed on the motion, he stated that his counsel had not discussed with him nor did he understand the nature and effect of the non-dissipation order. He admitted to using the moneys to pay debts and acknowledged this “may’ have breached the non-dissipation order. He went on to state that,

At the time I did not understand the nature and effect of that provision of the order and I did not knowingly believe that by paying these debts, which I really considered to be a debit and credit transaction, meant that I was breaching the order. As I have earlier indicated, I did not think this would make a difference in the equalization of our net family properties because the debts I was paying were incurred prior to the date of separation and would be considered in the final equalization.

[8] As to the timing of the payment, he indicated that the creditor,

began to push me very hard for repayment when she learned about my separation and my stock market losses … she is Russian and Russians deal with disputes differently than do Canadians. Knowing her and her Russian rules of handling business disputes, I felt I had no choice but to repay that legitimate debt.

[9] In his reasons, the motion judge correctly set out the criteria relevant to a finding of contempt of court. As set out by this court in Prescott Russell Services for Children and Adults v. G.(N.) (2006), 2006 81792 (ON CA), 82 O.R. (3d) 686 (Ont. C.A.):

A three-prong test is required. First, the order that was breached must state clearly and equivocally what should and should not be done. Secondly, the party who disobeys the order must do so deliberately and wilfully. Thirdly, the evidence must show contempt beyond a reasonable doubt.

[10] The trial judge, however, appears to have been of the view that a non-dissipation order “cannot be ignored because the money was being used to pay down debts” and then, later in his reasons, states that “it does not matter whether he used the funds to pay debt …”

[11] As to the appellant’s submission that the debt he paid was legitimate and did not represent a depletion of property or in any way defeat a claim that could be advanced by his spouse, the motion judge made no finding. The motion judge stated:

I am not in a position to prejudge whether or not an equalization payment will have to be made and the respondent will have to do a better job at proving his debts than he has done to the present if he is to utilize those debts as reduction for calculating his net family property.

[12] In order for contempt to have been made out in this case, the motion judge would have had to make specific findings with respect to the nature and consequences of the appellant’s decision to pay the substantial Russian debt.

[13] Since no such findings were made, we would set aside the finding of contempt.

[14] In setting aside the finding of contempt, we should not be taken as condoning the conduct of the appellant nor should we be taken to say that a finding of contempt is not available in this case.

[15] Whether the payment in question was made in repayment of a legitimate debt incurred prior to separation is closely connected to an assessment of this family’s net family property. It is also an important factor in the allegation of contempt and the determination of an appropriate penalty. We are of the view therefore that the trial of an issue is required. That is, the respondent is at liberty to bring a renewed motion for contempt where the legitimacy of the debt can be determined as well as its impact on the issue of the equalization of net family property.

[16] For these reasons, the order of the motion judge is set aside.

[17] There will be no costs of the appeal and the costs of the proceedings below are reserved to the judge hearing the contempt proceedings.

“D. O’Connor A.C.J.O.,”

“J.C. MacPherson J.A.”

“Paul Rouleau J.A.”