SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: FS-13-3729-00
DATE: 20140523
RE: KARRAWAN KARRAWAN – and – NADA MABROUK
BEFORE: F. Dawson J.
COUNSEL:
Omer S. Chaudry, for the Applicant
James A. Brown, for the Respondent (moving party)
HEARD: May 16, 2014
E N D O R S E M E N T
[1] The respondent Nada Mabrouk brings a motion for leave to appeal the interlocutory order of K. Barnes J. dated April 28, 2014. If leave to appeal is granted she also asks that the order of Barnes J. be stayed pending her appeal to the Divisional Court. Ms. Mabrouk also seeks a temporary order for child support for the couple’s two children, retroactive to June 17, 2013.
The Application for Leave to Appeal
[2] Rule 38 of the Family Law Rules, O. Reg. 114/99, adopts the provisions of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, in respect of Appeals to the Divisional Court and to the Court of Appeal in family law matters. Pursuant to s. 19(1)(b) of the Courts of Justice Act, R.S.O. 1990, c.C.43, an appeal lies to the Divisional Court from an interlocutory order of the Superior Court of Justice, with leave as provided in the rules of court. Rule 62.02 is the applicable rule in the Rules of Civil Procedure.
[3] Counsel agree that in this case the issue of whether leave should be granted must be determined pursuant to R. 62.02(4)(b). That rule provides that leave shall not be granted “unless 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.”
[4] Turning to the first part of this two part test, Ms. Mabrouk alleges essentially three errors. First, she points to the fact that the couple was not legally married but notes that at para. 3 of his endorsement Barnes J. referred to them as having been “married on September 5, 2007”. I observe that the material filed before Barnes J. described the couple as having been “religiously married” on that date.
[5] Second, she points out that at both paras. 10 and 27 of his endorsement Barnes J. referred to determining whether the applicant was entitled to an “equalization payment”. Of course, if the parties were not legally married there would be no question of an equalization payment. Counsel submits that these erroneous references suggest that Barnes J. applied the wrong test in determining whether to make the order in question. That order was that one-half of the net proceeds of sale of 8573 Creditview Road, Brampton (approximately $130,000) be held in trust pending resolution of Mr. Karrawan’s claim that he has an equitable interest in that and other property previously transferred into Ms. Mabrouk’s name.
[6] At this point some background information is of assistance. Karrawan Karrawan and Nada Mabrouk met in February 2007 and began to live together. In August 2007 Mr. Karrawan purchased a home located at 8573 Creditview Road, Brampton. Mr. Karrawan states that he used equity developed in properties he previously owned to assist in acquiring the Creditview property. The couple moved into that home. The couple subsequently had two children, Celine, born September 1, 2009 and Adan, born on July 15, 2011. The Creditview property was their family home.
[7] It is Mr. Karrawan’s position that he transferred legal title to the Creditview Road property to Ms. Mabrouk in August 2010 at a time when he was suffering severe financial problems. It is his position that the house was transferred into Ms. Mabrouk’s name to avoid losing the property and that she was aware of and agreed that he was transferring the home to her in trust.
[8] The couple subsequently separated in June 2013. Ms. Mabrouk and the children continued to live in the house. Mr. Karrawan claims that he continued to pay the mortgage. Then Ms. Mabrouk sold the house, allegedly without consulting with Mr. Karrawan.
[9] On August 27, 2013 Mr. Karrawan commenced an application claiming inter alia, that Ms. Mabrouk had been unjustly enriched and claiming an interest in the proceeds of the sale of the Creditview home on the basis of constructive trust. He subsequently brought a motion before Barnes J. seeking an order that the proceeds of sale be held in trust.
[10] Mr. Karrawan’s application also sought an order for unequal division of all property and unequal distribution of assets, the freezing of bank accounts and an order that the proceeds of sale of all property be held in trust. In the subsequent motion before Barnes J. he also sought an order that Ms. Mabrouk return a 2008 Dodge Challenger and a 2006 Volkswagen Jetta to him. He also sought to have his share of $45,000 he claimed to have placed in Ms. Mabrouk’s bank account returned to him. In his original application Mr. Karrawan alleged he regularly transferred his funds into Ms. Mabrouk’s personal bank accounts.
[11] Some additional facts are relevant. On April 16, 2012 Mr. Karrawan filed an assignment in bankruptcy. Ms. Mabrouk’s third ground of appeal relates to the bankruptcy. Her counsel points out that in the Statement of Affairs completed by Mr. Karrawan he did not disclose his claim to an interest in the Creditview property as advanced in the family law proceedings. Counsel submits this diminishes the credibility of Mr. Karrawan’s claim to an equitable interest in the property. He also submits in relation to the leave to appeal application that Barnes J. failed to properly take into account that Mr. Karrawan was engaged in defrauding creditors, and that he was not entitled to the equitable remedy he sought because “he did not come to court with clean hands”.
[12] Having carefully reviewed the entire endorsement of Barnes J. I am of the view that his erroneous references to marriage and to equalization payments do not reflect any true error in his resolution of the motion. A review of his reasons in their entirety demonstrates that he fully understood that the claim in Mr. Karrawan’s application, and hence the claim in his motion, was based on the law of constructive trust and unjust enrichment and not equalization on the basis of a net family property regime.
[13] At the commencement of his endorsement Justice Barnes listed with reasonable precision, and in correct language, the nature of the claims advanced. At para. 9 and following, he referred to s. 12(b) of the Family Law Act, R.S.O. 1990, c.F.3, as providing the authority to make an order for preservation of property. He then articulated and applied the test for an interlocutory injunction after referring to cases which discuss whether an order under s. 12(b) should be treated as such. From that point on in his endorsement it is clear he is applying that test. Nothing in the operative part of his reasoning suggests that Justice Barnes’ reference to “equalization” was anything more than an inaccurate short form which did not manifest itself as a true error.
[14] Justice Barnes recognized the highly conflicting nature of the affidavit evidence before him and concluded that a trial would be required to resolve those conflicts. He thought it appropriate on the basis of the test for injunctive relief that one-half of the proceeds of the sale of the property be preserved to be available should Mr. Karrawan succeed at trial. He took into account that Ms. Mabrouk would receive the other half, about $130,000. He was aware of the claim for one-half of the $45,000 in her personal bank accounts and of Mr. Karrawan’s claimed interest in the other assets, including the vehicles. He said he was unable to predict on the basis of the evidence before him how these claims would likely turn out at trial and concluded that some of the proceeds of the home sale should therefore be preserved. He also ordered that the vehicles were to be preserved by Ms. Mabrouk. These orders seem to me to be entirely reasonable in the circumstances.
[15] The applicability of the “clean hands” doctrine is equally contentious and I am satisfied Barnes J. saw it as a matter that would require a trial to resolve. Ms. Mabrouk claims the Creditview property was transferred to her pursuant to the terms of a separation agreement. However, the separation agreement has never been produced and Mr. Karrawan denies that was the basis for the transfer. It appears Ms. Mabrouk may have been complicit in any arrangement to protect the property from creditors. That is an issue for trial.
[16] I also note that Barnes J. took into account the impact his order would have upon the children. He concluded that Ms. Mabrouk had, perhaps imprudently, entered into an agreement to purchase another residence which she maintained depended upon her access to all of the proceeds of sale of the Creditview home, although she was aware of Mr. Karrawan’s claim. Justice Barnes observed that she was still receiving $130,000 as half the proceeds of the sale and that she therefore had the means to provide suitable accommodation for the children.
[17] As I see no good reason to doubt the correctness of the decision made by Justice Barnes. It follows that leave to appeal must be denied under R. 62.02(4)(b).
[18] I also observe that there is nothing in the material before me to indicate that this matter raises issues of general or public importance and accordingly I would also deny leave to appeal under the second branch of the rule.
[19] As leave to appeal is denied there is no need to comment on the application to stay the effect of Justice Barnes’ order.
Child Support
[20] The two children are residing with their mother and Mr. Karrawan agrees he must pay guideline child support.
[21] Financial disclosure between the parties remains incomplete. The best evidence available establishes that Mr. Karrawan is unemployed and receiving Employment Insurance benefits of $878.00 bi-weekly.
[22] I invited counsel for Ms. Mabrouk to point me to any evidence (as opposed to comments or suspicions that were not substantiated) upon which I could properly impute a greater income to Mr. Karrawan. Counsel was not able to do so at this time.
[23] Counsel for Mr. Karrawan points out that Mr. Karrawan worked as a truck driver until December 2013 when his employment ended. He notes that on a previous motion before Snowie J. in October 2013 Mr. Karrawan disclosed the seasonal nature of the work he was doing. Counsel submits that Employment Insurance benefits seldom last more than 11 months. Therefore Mr. Karrawan’s projected annual income would be $19,316.00. Counsel for Ms. Mabrouk agrees there is not currently any evidential basis to dispute this projected income figure.
[24] I therefore order that on a temporary basis Karrawan Karrawan pay guideline child support for the two children in the amount of $295.61 per month commencing May 1, 2014.
[25] Ms. Mabrouk requests that the child support be retroactive to June 17, 2013. However, there is conflicting evidence about what Mr. Karrawan has paid in the past that may constitute child support or its equivalent. Consequently, I am of the view that the record as it now stands is inadequate as a basis for me to make this temporary order retroactive. That matter can be revisited when better evidence is available or at trial.
Costs
[26] If the parties are unable to agree on costs they should provide me with their costs outlines and written submissions within 15 days; submissions not to exceed three (3) pages.
F. Dawson J.
DATE: May 23, 2014
COURT FILE NO.: FS-13-3729-00
DATE: 20140523
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: KARRAWAN KARRAWAN – and – NADA MABROUK
BEFORE: DAWSON J.
COUNSEL: Omer S. Chaudry, for the Applicant
James A. Brown, for the Respondent (moving party)
ENDORSEMENT
F. Dawson J.
DATE: May 23, 2014