SUPERIOR COURT OF JUSTICE – ONTARIO
COMMERCIAL LIST
RE: Matvei Weig, Applicant
AND:
Roman Weig, Leib Broner, Lev Spitzin, Benjamin Finkelstein, 2014210 Ontario Ltd. c.o.b. Deluxe International Group, 2014052 Ontario Ltd. c.o.b. Deluxe Windows of Canada, 2014213 Ontario Ltd. c.o.b. Oakwood Fine Products, 1275330 Ontario Ltd., 973590 Ontario Ltd., Cleidons Deluxe Doors Inc., Cleidons Deluxe Windows Inc., Deluxe Developments International Inc., Deluxe Window Industries Inc., Deluxe Windows International Inc., Riz Management Inc., Royal Deluxe Profiles Limited, 1321867 Ontario Ltd., Northview Windows & Doors Inc., Evrica Enterprises Inc., Pride Windows and Doors Inc., 976017 Ontario Ltd., Floating Residence Inc., Oakwood Architectural Lumber Inc., Shrimp Deluxe Ltd., Vildrom Construction Ltd., Vimach Delux Arches Inc., Riga-22 Weg, LLC, MTI Ltd., California Deluxe Windows Industries, Inc., Wrought Iron Art Ltd., Royal Deluxe Windows International, Inc. (U.S.), Stone Mason and Architectural Carvers Creators Ltd., Roman W. Marketing and 1273268 Ontario Ltd., Respondents
AND BETWEEN:
Sofia Weig and Faina Prupes, Applicants
AND:
Matvei Weig, Roman Weig, Leib Broner, Lev Spitzin, Benjamin Finkelstein, 2014210 Ontario Ltd. c.o.b. Deluxe International Group, 2014052 Ontario Ltd. c.o.b. Deluxe Windows of Canada, 2014213 Ontario Ltd. c.o.b. Oakwood Fine Products, 1275330 Ontario Ltd., 973590 Ontario Ltd., Cleidons Deluxe Doors Inc., Cleidons Deluxe Windows Inc., Deluxe Developments International Inc., Deluxe Window Industries Inc., Deluxe Windows International Inc., Riz Management Inc., Royal Deluxe Profiles Limited, 1321867 Ontario Ltd., Northview Windows & Doors Inc., Evrica Enterprises Inc., Pride Windows and Doors Inc., 976017 Ontario Ltd., Floating Residence Inc., Oakwood Architectural Lumber Inc., Shrimp Deluxe Ltd., Vildrom Construction Ltd., Vimach Delux Arches Inc., Riga-22 Weg, LLC, MTI Ltd., California Deluxe Windows Industries, Inc., Wrought Iron Art Ltd., Royal Deluxe Windows International, Inc. (U.S.), Stone Mason and Architectural Carvers Creators Ltd., Roman W. Marketing and 1273268 Ontario Ltd., Respondents
BEFORE: D. M. Brown J.
COUNSEL:
M. Greenglass, for the Receiver, Schwartz Levitsky Feldman Inc.
S. Rosen, for Matvei Weig
B. Salsberg, for Roman Weig
D. Moore, for Avital Weig and Frances Weig
S. Zeitz, for Sofia Weig
HEARD: April 9, 2013
REASONS FOR DECISION (Corrected)
I. Receiver’s motion for directions
[1] By Reasons dated December 21, 2012 (2012 ONSC 7262) I appointed, on the application of Matvei Weig, a judgment creditor of Roman Weig, Schwartz Levitsky Feldman Inc. as receiver, without security, of all of the assets, undertaking and properties of Roman Weig to act as a receiver in aid of execution. The Receiver seeks directions regarding (i) the sale of Roman Weig’s interest in the matrimonial home located at 18 Franklin Avenue, Thornhill, Ontario, (ii) the ownership of the Cottage located at 990 Arnold Street, Innisfil, Ontario, and (iii) the delivery of information requested by the Receiver, as well as an order approving its First Report dated March 14, 2013 and Second Report dated April 8, 2013 and the activities described therein.
II. The Cottage
[2] Roman Weig’s two daughters have retained new counsel, Mr. Moore. He requested some time to get up to speed on the file. This matter has had a long history. The issue of who owns the Cottage must be decided before June 30, 2013. I set 2 days for the hearing of that issue, together with the issue of the amount of the indebtedness secured by the Share Pledge Agreement, as set out in paragraph 126 of my December Reasons. The 2-day hearing will take place on any of June 18, 19, 20, 21, 26, 27 and 28, 2013. Counsel shall agree on the two days by Tuesday, April 23, 2013, failing which they shall book an immediate 9:30 appointment before me at which I will fix the hearing for two of those days.
[3] The hearing shall use a hybrid method of adducing evidence. I have already considered affidavit and viva voce evidence from the daughters at trial last October. If the daughters intend to rely on any additional evidence, they must deliver their affidavits no later than May 17, 2013. If the Receiver intends to adduce any further evidence by way of reply, it must deliver it by May 31, 2013. Cross-examinations will take place at the hearing.
II. Sofia Weig’s claim under the Share Pledge Agreement
[4] The Receiver reported on Sofia Weig’s claim in paragraphs 21 through to 24 and paragraph 33 of its First Report. Sofia Weig filed an affidavit sworn April 1, 2013 in which she deposed: “I have proven my advance of funds.” From that I infer that no further evidence will be filed on this issue. If I am mistaken on that point, counsel must attend at a 9:30 appointment before me within the next two weeks to address that issue.
III. Receiver’s demand for information
[5] On January 14, 2013, the Receiver sent a letter to the parties requesting the delivery of certain information. A further letter was sent to counsel for Sofia Weig on February 25, 2013. The Receiver made further requests for information from Roman Weig at a meeting held on February 27, 2013. The Receiver has not received all requested information.
[6] At the hearing I directed the Receiver to deliver a list of outstanding information requests to the relevant parties by April 15, 2013. The parties to whom the Receiver has made those requests must deliver up the information no later than May 15, 2013. I shall not grant any extension of that date given the lengthy history of this matter.
IV. The Franklin Avenue house
[7] The Franklin Avenue matrimonial home was owned jointly by Roman and Sofia Weig. Following its appointment, the Receiver registered a deed effectively severing the joint tenancy and creating a tenancy in common.
[8] Although encumbered, the Receiver reported that the equity in the House is likely just over $700,000. The Receiver described the results of its inquiries concerning the House at paragraphs 5 through to 14 of its First Report, and reported that under the various scenarios concerning the spouses’ financial dealings with the House, some equity would attach to Roman’s interest and would be available for his creditors.
[9] The Receiver recommended first providing Sofia Weig with an opportunity to purchase Roman’s interest in the House. In her affidavit Sofia deposed that she lacked the financial resources to buy-out Roman’s interest. In its First Report the Receiver proposed that in the event Sofia could not or would not purchase Roman’s interest, then the court should direct a sale of the House pursuant to the Partition Act. As I read her affidavit, Sofia based her opposition to such a sale primarily on the basis that a “variety of other assets” existed for the Receiver to pursue and it “would be unjust and inequitable to force my hand by compelling me to leave my home and have it sold”. She stated:
In view of the foregoing I strongly oppose any requests for Orders for sale or directing me to purchase the Receiver’s interest in the Property at this time when I do not have the resources to pay for same.
[10] Recently, in Di Felice v. 1095195 Ontario Limited, 2013 ONSC 1, I summarized the principles governing the sale of a property under the Partition Act:
[108] Sections 2 and 3(1) of the Partition Act, R.S.O. 1990, c. P.4, provide:
All joint tenants, tenants in common, and coparceners, all doweresses, and parties entitled to dower, tenants by the curtesy, mortgagees or other creditors having liens on, and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only.
(1) Any person interested in land in Ontario, or the guardian of a minor entitled to the immediate possession of an estate therein, may bring an action or make an application for the partition of such land or for the sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested.
[109] Recently, in Garfella Apartments Inc. v. Chouduri, the Divisional Court nicely summarized the principles governing the partition and sale of land:
All tenants in common (along with many other categories of co-owners) are subject to having their property partitioned or sold at the behest of another person with an interest in the land.
The presumption is in favour of partition, rather than sale. However, a sale will be ordered if the court considers it to be "more advantageous to the parties." A sale has also been found to be appropriate when the land is not suitable for partition.
There is a prima facie statutory right for tenants in common to compel either a partition or sale.
The court retains a discretion to refuse any relief, i.e. neither partition nor sale. However, the onus is on the responding party to demonstrate circumstances warranting the refusal of such relief. This is only appropriate in circumstances of malice, oppression, or vexatious intent. The Court of Appeal in Greenbanktree stipulated that "oppression" in this context includes "hardship ... of such a nature as to amount to oppression."
[110] As put by the Court of Appeal in Greenbanktree Power Corp. v. Coinmatic Canada Inc.:
Co-tenants should only be deprived of this statutory right in the limited circumstances described above, with this caveat. In our view, "oppression" properly includes hardship, and a judge can refuse partition and sale because hardship to the co-tenant resisting the application would be of such a nature as to amount to oppression.
[111] In exercising its discretion under section 2 of the Partition Act a court should take into account the effect of any agreement between the parties about the land in question.
[11] Sofia Weig has not demonstrated any circumstances which would warrant refusing the Receiver its requested order of partition and sale. To the contrary. In my December Reasons I reviewed at some length the evidence relating to the financial dealings of Sofia and Roman in respect of the House, Sofia’s refusal to produce the records of joint bank accounts, the lack of accuracy in the information she provided about the Line of Credit, the assistance Sofia gave has given to her husband to obstruct the enforcement process of the Judgment and the improper collusion between Sofia and her husband in respect of the Default Judgment. Such misconduct by Sofia puts her in no position to be granted relief from the order sought by the Receiver.
[12] Accordingly, I grant the Receiver’s request for an order selling the House under the Partition Act, in a manner reasonable for the sale of a residential property in the GTA, with the net proceeds of the sale to be held by the Receiver pending further order of this Court regarding their distribution. If the parties are unable to settle the form of the sale order by April 29, 2013, they shall book an immediate 9:30 appointment before me to settle and issue the order.
V. Receiver’s reports
[13] I approve the First and Second Reports of the Receiver and the activities described therein.
D. M. Brown J.
Date: April 18, 2013