Court and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20210519 DOCKET: M52443 (M52096)

Jamal J.A. (Motions Judge)

BETWEEN

Joelle Spadacini Kelava Responding Party

and

David George Kelava Moving Party

Counsel: Donna Wowk, for the moving party Martha McCarthy, for the responding party

Heard: May 17, 2021 by video conference

Reasons for Decision

[1] The moving party husband (“husband”) moves to stay portions of the order of Kurz J. of the Superior Court of Justice made on December 17, 2020 (“Order”) declaring that the responding party wife (“wife”) is a 50% joint owner of the matrimonial home and directing it to be listed for sale by March 1, 2021.

[2] The husband’s materials on the motion for the stay were unclear as to whether he sought a stay pending only the decision on his motion for leave to appeal to this court from the Order, or whether, if leave was granted, he sought a stay pending the decision on any appeal. In oral submissions, however, counsel for the husband clarified that he seeks a stay pending only the decision on his motion for leave to appeal.

[3] The husband tried in mid-February 2021 to obtain the wife’s consent to stay the Order pending a decision on his motion for leave to appeal, but she did not consent. The husband has thus been in breach of the Order for about 11 weeks.

[4] For the reasons that follow, the motion to stay the Order is dismissed.

Background

[5] The parties married in 2000. They have two children of the marriage, aged 12 and 11. Both children have special needs. The younger child has severe autism, while the older child has Attention Deficit Hyperactivity Disorder or ADHD.

[6] In 2006, the parties bought a five-bedroom matrimonial home in Oakville. The wife contributed $120,000 of her savings towards the purchase price and was jointly on the mortgage covenant. For a long time, both the husband and wife believed they jointly owned the matrimonial home.

[7] In 2014, the wife relocated with the children to Indianapolis to obtain specialized treatment for their younger child’s autism. The husband stayed in Ontario. About a year later, the parties separated and the wife began family law proceedings in Ontario.

[8] The husband and wife arbitrated their family law dispute before an arbitrator. In their financial statements filed with their pleadings, both parties listed the matrimonial home as jointly owned. Both continued to believe this and represented this position in the family law proceedings until about the end of May 2019. At that time, when refinancing the matrimonial home, the husband learned that it was registered in his name alone. The weekend before the arbitration began in July 2019, the husband now claimed that the matrimonial home was his alone and that only he should benefit from any post-separation increase in value during the four years since the parties’ separation.

[9] The arbitrator rendered an award dated September 10, 2019, addressing both parenting and financial matters. He ordered the children returned to the Toronto area. He rejected the wife’s argument that the husband should be estopped from claiming that the matrimonial home was his alone and decided that it should be treated as solely the husband’s asset for equalization purposes.

[10] Both parties appealed the arbitrator’s award. The wife’s appeal focussed on the return of the children to Ontario and the treatment of the matrimonial home as solely the husband’s asset.

[11] The appeal was heard by Kurz J. (“appeal judge”) of the Superior Court of Justice. He decided the more pressing parenting issues in reasons dated September 16, 2020, reported as Spadacini-Kelava v. Kelava, 2020 ONSC 5561, upholding the arbitrator’s order that the children be returned to Ontario. He then decided the financial issues in reasons dated December 17, 2020, reported as Spadacini-Kelava v. Kelava, 2020 ONSC 7907, 52 R.F.L. (8th) 143, finding that the matrimonial home should be treated as jointly owned. Since the husband had taken the property off the market, the appeal judge ordered that it be listed for sale by March 1, 2021.

[12] As ordered by the appeal judge, the wife returned to Ontario in December 2020. Her unchallenged evidence on this motion is that, for the past five months, she and the children have been living in her parents’ bungalow. One child shares a bed with his grandmother, while the wife and the other child sleep on a couch in the basement. The wife cares for the children full-time. Without the balance of the equalization payment owed to her or access to the equity in the matrimonial home, she cannot afford a down payment or qualify for a mortgage.

[13] On January 6, 2021, the husband filed his notice of motion for leave to appeal to this court from the Order of the appeal judge. He seeks leave to appeal on various grounds, including alleged procedural unfairness, errors of law, and errors of mixed fact and law.

[14] On April 28, 2021, the husband moved to stay the appeal judge’s Order requiring that the matrimonial home be listed for sale by March 1, 2021.

[15] The husband has no statutory right to appeal to this court. He has exercised a first right of appeal to the Superior Court, without leave, as provided under the parties’ mediation-arbitration agreement: Arbitration Act, 1991, S.O. 1991, c. 17, ss. 45(2), (3) and (6). A second appeal requires leave of this court: Arbitration Act, 1991, s. 49.

The Test for a Stay

[16] To obtain a stay of a judgment pending a motion for leave to appeal, a moving party must meet the three-part test for an interlocutory injunction: (1) a serious question to be determined on the motion for leave to appeal; (2) the moving party will suffer irreparable harm if the stay is denied; and (3) the balance of convenience favours granting the stay: RJR – MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, at p. 334.

[17] In applying this test, the court is mindful that “[t]hese three criteria are not watertight compartments. The strength of one may compensate for the weakness of another. Generally, the court must decide whether the interests of justice call for a stay”: Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674 (C.A.), at p. 677.

Application to This Case

(1) Serious question to be determined

[18] The threshold to establish a serious question to be determined is low. The court must make a preliminary assessment of the merits of the case and determine whether the issues are neither frivolous nor vexatious: RJR – MacDonald, at p. 337; Circuit World, at p. 677.

[19] The husband’s notice of motion for leave to appeal raises several grounds, including alleged procedural unfairness, errors of law, and errors of mixed fact and law. He asserts that the appeal judge erred because the wife did not apply for ownership of the matrimonial home at the arbitration or plead material facts supporting such an application and that she made these arguments for the first time on appeal. He also claims that the appeal judge decided new arguments on appeal relating to issue estoppel, res judicata, and proprietary estoppel, largely on his own initiative.

[20] During the oral argument, the wife’s counsel fairly conceded that the question of whether the court should grant leave to appeal from the order declaring the wife the half-owner of the matrimonial home is not frivolous or vexatious, although she contended other aspects of the leave motion are baseless.

[21] I accept and agree with the wife’s concession. Although I have serious doubts about whether the husband can meet the stringent test for leave to appeal, the motion for leave to appeal is neither frivolous nor vexatious. The husband thus meets the low threshold to raise a serious issue.

(2) Irreparable harm

[22] Irreparable harm is “harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other”: RJR – MacDonald, at p. 341.

[23] The husband asserts that he will suffer irreparable harm in two respects if the stay is denied.

[24] First, he says that the Order requires that he list for sale an asset — the matrimonial home — that he does not want to list for sale and that he would not have to list for sale if he obtains leave to appeal and then wins the appeal.

[25] I do not accept this submission. On the evidence before me, the husband has not established irreparable harm. There is no evidence that the matrimonial home is unique or otherwise irreplaceable, and I am not satisfied on the evidence before the court that the husband could meet his equalization obligations without selling the house, even if he obtains leave to appeal and wins the appeal. Because the husband seeks a stay, he bears the evidentiary burden of establishing that he would not have to sell the matrimonial home if he succeeds on the motion for leave to appeal and on the appeal. He has not met this burden. By contrast, the wife adduced compelling evidence on this motion that her husband has been unable to manage his financial obligations since they separated. She provided evidence of his conduct in reducing and then defaulting on his mortgage payments, informing her they were at risk of losing the matrimonial home, defaulting on payment of property taxes, and defaulting on his child support obligations until the wife moved to compel payment.

[26] Based on the record before me, I conclude that the first category of harm that the husband claims in being required to sell the matrimonial home is essentially harm that can be quantified in monetary terms. If he obtains leave to appeal and then wins the appeal, there can be a financial adjustment if necessary.

[27] Second, the husband asserts that the matrimonial home is the only home the children have known and that given their special needs it would disrupt them to require them to visit him in a new home.

[28] I do not accept this submission. There is no cogent and persuasive evidence before the court that the children would be harmed, far less harmed irreparably, if the matrimonial home is listed for sale. The children have lived in Indiana for the last seven years. They visit their father only a few days a month and spend most of their time with their mother, living in difficult conditions in their grandparents’ bungalow. In these circumstances, as the wife contends, the children's interests would be far better served by selling the matrimonial home, as this would allow the wife to access the necessary capital to buy a home for herself and the children where the children would spend most of their time.

[29] The husband has thus not met his burden of establishing irreparable harm.

(3) Balance of convenience

[30] Finally, the balance of convenience involves a determination of who would suffer the greater harm from granting or refusing the stay, pending a decision on the merits: RJR – MacDonald, at p. 342.

[31] I find that the wife will suffer greater harm if a stay is granted than the husband will suffer if the stay is refused.

[32] Without access to the equity in the matrimonial home — to which a court has found she is legally entitled — the wife cannot purchase a home to provide the children with stable and comfortable living accommodation. The father’s response to this is to assert that at the time of the arbitration the wife intended to rent. But that was two years ago. The wife is now back in Ontario, as ordered by the arbitrator, and wishes to buy a home, as is her right. On the other side of the scale, I see no harm to the husband beyond the inconvenience of selling the house, which is not his preference. On these facts, I find the balance of convenience tips decisively in the wife’s favour.

[33] The wife has complied with the appeal judge’s order regarding parenting by returning to Ontario. It is only fair — and in the interests of justice — that the husband now immediately comply with the appeal judge’s order to list the matrimonial home for sale.

Disposition

[34] The motion is dismissed.

[35] If the parties cannot agree on costs, they may file brief written submissions of no more than 3 pages, with a bill of costs, within 15 days.

“M. Jamal J.A.”