SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: FS-13-0121
DATE: July 14, 2014
RE: MARGARET HACKETT - Applicant v. ROBERT HACKETT - Respondent
BEFORE: Mr. Justice Martin James
COUNSEL: Kurt Anders, for the Applicant
Self-Represented Respondent
HEARD: July 11, 2014
ENDORSEMENT
Introduction
[1] The applicant applies for an order transferring the ownership of certain vehicles from the name of the respondent into the name of the applicant.
[2] Less than two months ago, the applicant brought a similar motion to vest certain real estate in her name in order to facilitate the refinancing of the business property after the mortgagee called its loan. This motion was successful.
[3] In addition, the respondent brings a cross-motion for an order of contempt of court for non-payment of draws and salary owing to the respondent and his son and for a temporary order allowing him to take control and management of the family business. The respondent previously brought a contempt motion in May, 2014 based on similar grounds.
Background
[4] The parties operated a cleaning business as a partnership during their marriage. They separated in early 2012. The parties made a without prejudice agreement in November 2012 that covered various topics, including how they were going to deal with the business on an interim basis. Shortly after the without prejudice agreement was made, the applicant says the respondent improperly took $19,000 from the business bank account. The respondent has accounted for his use of these funds (Ex L, respondent’s May 25/14 affidavit). In addition, the applicant alleges that the respondent cancelled credit cards used in the business, removed equipment and inventory from the business premises that he had agreed to stay away from and removed licence plates from business vehicles.
[5] The parties subsequently agreed to a consent order on February 1, 2013. This order included the following provisions:
a) The business is to appraised;
b) the applicant shall purchase the respondent’s interest in the business subject to financing and in the interim shall oversee the management of the business;
c) the applicant shall produce to the respondent on a bi-weekly basis a copy of all bank transactions, payroll records, vehicle logs and shift schedules;
d) the respondent shall continue to receive his draw from the business;
e) the respondent’s son shall also continue to receive a salary from the business;
f) neither the respondent nor his son shall engage in the business activities and will not be associated with any competitive business;
g) the respondent shall return to the business all equipment, cleaning supplies, inventory and business vehicles;
h) the status quo for the business to be maintained and no unilateral/without notice change may be undertaken by either the applicant or the respondent.
[6] The respondent says that within a few days the applicant failed to pay the draw that he was entitled to receive pursuant to this order. He also says the applicant began taking money from the business bank account for her personal use.
[7] In or about May, 2013 the applicant terminated the employment of the respondent’s son due to allegations of theft. Since then, the situation between the parties has continued to deteriorate.
[8] In June, 2013, after having served notice that he was going to represent himself, the respondent brought a motion for an order granting him access to the business bank account, for “verification” of business income and expenses, payment of draws, payment of salary to his son and for the appointment of an arbitrator to oversee the division of assets and the return of his gun collection which he says was scooped by the applicant.
[9] The applicant brought a cross-motion to prevent the respondent from interfering with the business. The applicant alleged that the respondent had committed numerous misdeeds in relation to the business and delivered an affidavit sworn by an employee detailing abusive conduct by the respondent. The evidence disclosed a pattern of serious interference and harassment by the respondent.
[10] On June 28th, 2013 Ray J. dismissed the respondent’s motion after commenting that the respondent’s affidavit was not “helpful” and granted the applicant’s request for an order restraining the respondent from attending at the business premises and from interfering with its operations. He ordered the respondent to return the license plates he had removed from business vehicles and to cooperate with the listing of the properties.
[11] Also in June, 2013 the business appraiser finalized his appraisal and estimated the net value of the business at $191,792 which incorporates the uncertain assumption that the business property has a fair market value of $350,000. Technically, the business property is not a business asset and is jointly owned by the parties. In addition, the parties own a rural property known as the Bear’s Camp. It has an appraised value of $250,000.
[12] The applicant says the respondent has consistently refused to sign a listing agreement for the appraised value of the Bear’s Camp property.
[13] The respondent retained his present counsel in August, 2013.
[14] A case conference was held in April, 2014.
[15] In May, 2014 the applicant re-financed the business property in response to the mortgagee’s demand for payment after obtaining an order permitting her to vest the lands in the applicant’s name. The replacement financing required collateral security on two other properties owned by the parties, the Bear’s Camp and a residence at 162 John Street in Pembroke.
[16] On May 26, 2014 the respondent brought a motion against the applicant for contempt of court for failure to pay the amounts agreed to be paid in the February 1st, 2013 consent order. Notwithstanding the fact that the respondent was advised that contempt proceedings are not available in relation to orders for the payment of money, when the applicant brought her latest motion for an order vesting the vehicles in her name, the respondent filed another contempt motion on essentially the same grounds. He also requested that he be restored to his former management position in the business to the exclusion of the applicant.
The Motions Presently before the Court
[17] When the present motions were heard, the respondent’s counsel was ill. The respondent indicated that he wanted to proceed without the benefit of counsel.
[18] At the hearing of the previous motion in May, 2014 I determined that the objective of protecting the business premises from mortgage enforcement proceedings commenced by the Royal Bank of Canada warranted an order vesting the property in the name of the applicant so it could be refinanced. To have taken no action would likely have resulted in power of sale proceedings against the property. This in turn would have further compromised the ability of the business to carry on operations.
[19] At present, the respondent’s objective appears to be to frustrate the applicant’s ability to manage the business by cancelling the auto insurance policies on vehicles used to conduct the business. The respondent’s explanation that he cancelled the insurance because he had liability concerns because the vehicles were registered in his name strikes me as ingenuous. In my view it is more likely that the respondent cancelled the insurance in his continuing efforts to secure the payments that he believes are owed to him pursuant to the February 1, 2013 consent order.
[20] The respondent says that the successful continuation of the business is very important to him but his actions seem inconsistent with this assertion. There is circumstantial evidence that he has been competing with the existing business. When the bank for the business called its loans, including the mortgage in relation to the business premises, the respondent would not cooperate with the applicant to refinance the property. Ultimately, the property was vested in the applicant’s name in order to forestall enforcement proceedings by the outgoing mortgagee.
[21] While the respondent undoubtedly believes there is a reasonable basis for his complaints against the applicant, as I have previously indicated, it is premature at this stage for the court to make conclusive factual findings. To the extent fault is relevant, such findings will have to await trial. Despite his indignation at the course of events, the respondent may be viewed as his own worst enemy; complicating matters, exacerbating the problems, compounding issues, all without perceptible benefit to him and taking the focus off what he says the applicant should and shouldn’t be doing.
[22] I remain of the view that reasonable steps ought to be taken to protect the existing business as its true value will eventually be made available to both parties in some fashion. Accordingly, I am prepared to grant the applicant’s request.
[23] One of the vehicles included in this motion was damaged in an accident and there is a payment pending from the insurance company in relation to this loss. I am not aware whether the vehicle was a total loss or is repairable. If repairable, the insurance proceeds ought to be used for repair purposes. If it is a total loss, it is my view that the insurance proceeds should not be deposited in the business bank account and used for general business purposes. Instead, the cheque representing payment of the insurance proceeds for this automobile ought to be held pending an agreement between the parties as to the proper disposition of the proceeds or further order of the court.
[24] An order shall issue vesting the following vehicles in the name of the applicant so that the applicant may have the ownership documentation transferred into her name and obtain insurance:
[25] The applicant shall be required to maintain the vehicles and keep them in a reasonable state of repair consistent with their age and mileage. The applicant is not permitted to dispose of any of the vehicles without the agreement of the respondent or further order of the court.
[26] The respondent’s motion is dismissed.
[27] Costs to the applicant, as of one motion, fixed in the amount of $5,000 plus HST, payable by the respondent forthwith.
[28] The applicant is granted leave to issue an order pursuant to this endorsement without approval of the draft order by, or on behalf of, the respondent.
Mr. Justice Martin James
Date: July 15, 2014
COURT FILE NO.: FS-13-0121
DATE: July 15, 2014
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: MARGARET HACKETT
Plaintiff
AND
ROBERT HACKETT
Respondent
BEFORE: Mr. Justice Martin James
COUNSEL: Kurt Anders, for the Applicant
Self-Represented Respondent
ENDORSEMENT
Martin J.
Released: July 15, 2014