CITATION: Aslezova v. Khanine, 2020 ONSC 4458 DIVISIONAL COURT FILE NO.: CVD-OSH-12-20AP

SCJ File No: FS-15-04776-01(Newmarket) DATE: 20200723

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Backhouse, D.L. Corbett and Lederer JJ.

BETWEEN:

Janna Aslezova

Applicant/Respondent

("the wife")

– and –

Mikhail Khanine

Respondent/Appellant

("the husband")

Paul Mazzeo and Sneha Gohil, for the Applicant/Respondent

Eli Karp and Eli Smolarcik, for the Respondent/Appellant

HEARD at Toronto: June 30, 2020

REASONS FOR DECISION

Backhouse J.:

[1] The husband appeals the March 6, 2020 Order of Justice G. Macpherson of the SCJ (Newmarket) ("the motion judge") granting the wife's motion for an order of partition and sale of the parties' jointly owned former matrimonial home at 136 Arnold Avenue, Thornhill, Ontario ("the property").

[2] The husband applied for an interim stay of the motion judge's order for partition and sale which was denied on May 12, 2020 by Justice Corbett at a case management conference. However, Justice Corbett did provide that the husband could move for an interlocutory stay, on complete materials, if he was so inclined. The husband did not do so. The sale of the property closed on June 26, 2020. At the commencement of the appeal, we asked for submissions as to whether this appeal was moot.

[3] The husband submitted that the appeal was not moot because:

(a) it is not clear from the motion judge's order that he had not made a final determination on the husband's trust claim;

(b) whether the motion judge erred in ordering partition and sale was relevant to the issue of costs below and on the appeal;

(c) the wife should not be permitted to make the appeal moot by proceeding to sell the property in the face of the pending appeal, which sale only occurred 3 days before the hearing date for the appeal.

[4] The husband submitted that even if the appeal was moot, we should exercise our discretion to hear the appeal because the three rationales for not hearing a moot case as set out in Borowski v. Canada (Attorney General) [1989]1 S.C.R. do not apply here.

[5] An appeal is moot when a decision will not have the effect of resolving some controversy affecting or potentially affecting the rights of the parties. I do not agree that there is any ambiguity regarding the motion judge's order. Costs of the motion below and of this appeal are not a basis in this case for finding that the appeal should be heard notwithstanding the sale of the property. The order for partition and sale was not stayed. The wife was entitled to sell the property and did nothing unreasonable in proceeding to do so in accordance with the order. This is not a case where a litigant has rushed to enforce an order to frustrate an opponent's efforts to obtain a stay. The husband wrongly took the position that the wife was not entitled to sell the house because he was appealing. Then the husband was given an opportunity to seek a stay – which was denied on an interim basis and which the husband chose not to pursue on an interlocutory basis. The wife was fully entitled to sell the house on the strength of the orders of G. Macpherson J. The husband has been aware of an executed agreement of purchase and sale since mid-April, 2020. The sale has now closed, the appeal is moot and I decline to exercise my discretion to hear the appeal.

[6] The wife's bill of costs claims full indemnity costs of $21,989.80 and partial indemnity costs of $14,627.18. The wife seeks costs on a full indemnity basis because of the husband's unreasonableness and the fact that she delivered an offer to settle which provided that if the husband withdrew his appeal by June 18, 2020, there would be no costs. The wife's offer was not accepted and there was no counter-offer.

[8] The husband submits that there should be no costs on the basis that it was not unreasonable for the husband not to accept the wife's offer because as at June 18, 2020, it was unknown whether the closing of the sale would take place

[9] In determining the appropriate costs order, on the written record before us, I[1] see no merit in the underlying appeal. The husband has been litigating unreasonably and pursuing this moot appeal, in the face of an executed agreement of purchase and sale, and then in the face of the closing of the sale. This is oppressive. I note the following factual background.

[10] The parties were married for 20 years. The parties separated for a final time on July 17, 2017. The husband resides in Russia or Israel (his exact whereabouts are unknown) and has not returned to Ontario since September, 2017.

[11] The parties have 4 children who until its sale, resided with their mother in the property. The children are: 7 year old Jack, 12 year old Daniel, 18 year old Stephany and 24 year old Sofia.

[12] During the marriage the wife remained in the home looking after the children and the household while the husband was the income earner. The wife has no income and she and the children are completely dependent on the husband for support. After separation, unbeknownst to the wife, the husband failed to pay the mortgage on the property ($9000/month). This resulted in the wife having to borrow and to the bank threatening power of sale. The failure to pay the mortgage continued even after the husband consented to an order to pay one-half of the mortgage payments.

[13] The husband served an affidavit in May, 2019 in which he agreed to sell the property. Thereafter, he would not sign a listing agreement. The husband did not raise the allegation that he had a trust claim in the property until 1½ years after the wife commenced her application. After the motion judge ordered the property sold, it was necessary for the wife to return to court to obtain a further order giving her carriage of the sale and dispensing with the husband's consent. The court found that the husband was unreasonably withholding his consent in an attempt to thwart the sale.

[14] It is not disputed that after separation, the husband transferred four corporations into the name of the paternal grandmother. The motion judge found that there was a dearth of disclosure of the husband's various business interests and that he has no other assets in Canada other than 3 jointly owned real estate properties or proceeds of sale therefrom, one of which is the property in issue here.

[15] The husband deposed his income is $44,000/year. The motion judge found that the value of the three jointly held real properties in Canada exceeded $10,000,000. The children's private school costs between $30,000 and $35,000 per year per child. The mortgage on the property was $9,049/month. The motion judge noted that a family of six cannot live on $44,000/year and amass wealth of over ten million dollars. He imputed income of $500,000/year for the purpose of a temporary support award.

[16] Notwithstanding the husband's representation that his income was $44,000/year and his failure to pay the property's expenses, after the property was ordered sold, he attempted to get the wife to sell her interest in the home to him and if she did not agree, he said he would appeal the order which he proceeded to do. Further, he sought to get her to agree to his using as payment monies the Court had refused to release to him and ordered remain in trust. The husband then sought a stay of the order for partition and sale on the basis that the home had special value to him and he wished to keep it (although he vacated the property almost three years ago and lives out of the jurisdiction).

[17] After opposing the sale of the home before the motion judge, the husband failed to make any payments towards the mortgage for March, April or May, 2020. He is in default of his court ordered support obligations.

[18] Selling the property does not prejudice the husband from pursuing his trust claim at trial. The motion judge correctly noted that property held in the name of spouses as joint tenants is proof in the absence of evidence to the contrary that the spouses are intended to own the property as joint tenants. There is nothing in the written record before us that would support that the husband has made out a prima facie trust claim.

[19] I note that the husband claimed costs of the appeal on a full indemnity basis of $19,464.25. His bill of costs discloses partial indemnity costs in the amount of $11,726.58.

[20] In sum, the husband has failed to comply fully with his court ordered support. He failed to pay for the carrying costs of the property and opposed its sale. After the sale was ordered it was necessary for the wife to return to court for an urgent motion for carriage of the sale. The court found the husband was withholding his consent unreasonably to the sale in an attempt to thwart the sale. Bringing this appeal in light of these circumstances has the hallmarks of a tactical strategy lacking bona fides and amounting to bad faith. In all the circumstances, the wife is entitled to the costs of the abortive appeal on a full indemnity basis which I fix in the amount of $20,000. In fixing this amount I place no weight on the offer to settle: it expired before the commencement of the hearing and there is more than a sufficient basis for full indemnity costs for the other reasons set out above.

_____________________________ Backhouse J.

I agree: ______________________________

D.L. Corbett J.

I agree: ______________________________

Lederer J.

Released: July 23, 2020

CITATION: Aslezova v. Khanine, 2020 ONSC 4458

DIVISIONAL COURT FILE NO.: CVD-OSH-12-20AP

SCJ File No: FS-15-04776-01(Newmarket) DATE: 20200723

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Backhouse, D.L. Corbett and Lederer JJ.

BETWEEN:

Janna Aslezova

Applicant/Respondent

– and –

Mikhail Khanine

Respondent/Appellant

REASONS FOR DECISION

Backhouse J.

Released: July 23, 2020

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