ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FS-15-0256-00
DATE: 2015 12 10
BETWEEN:
EUGENIUSZ JUREWICZ
Steven M. Fehrle, for the Applicant
Applicant
- and -
WANDA JUREWICZ
Steven Benmor, for the Respondent Wanda Jurewicz
GABRIELLE JUREWICZ
Paul K. Steckley, for the Respondent Gabrielle Jurewicz
Respondents
HEARD: November 17, 2015
REASONS FOR DECISION
EMERY J
[1] The appellant husband, Eugeniusz Jurewicz, has appealed the interim family arbitration award made by arbitrator Lorne Wolfson, dated October 28, 2015 that the matrimonial home located at 8395 Creditview Road in Brampton shall be immediately listed and sold. On November 5, 2015, Mr. Wolfson further directed that Mr. Jurewicz should advise on or before November 10, 2015 as to which of the five names of licenced real estate agents proposed by Mrs. Jurewicz he wished to be the listing agent. If he did not do so by November 10, 2015, Mrs. Jurewicz could select a real estate agent from that list and unless Mr. Jurewicz had obtained a court order staying Mr. Wolfson’s arbitral award by November 23, 2015, Mrs. Jurewicz would be free to sign a listing agreement to sell the matrimonial home as of November 24, 2015.
[2] Instead of selecting the name of a realtor, Mr. Jurewicz filed a notice of appeal in the Superior Court of Justice on November 12, 2015.
[3] Mr. Jurewicz brings this motion to stay the award made by Mr. Wolfson dated October 28, 2015. If ordered, a stay will effectively pre-empt his further direction allowing Mrs. Jurewicz to sign a listing agreement pending the appeal.
[4] On November 23, 2015 I issued a short endorsement granting the stay, with reasons to follow. These are those reasons.
A BRIEF HISTORY
[5] Mr. and Mrs. Jurewicz were married on December 17, 1994 in Mississauga, Ontario. They separated on February 15, 2013.
[6] Mr. and Mrs. Jurewicz have four children. Their eldest daughter, Gabrielle Jurewicz, is 25 years old. Gabrielle currently lives with her mother.
[7] The matrimonial home is located 8395 Creditview Road, Brampton, Ontario. Mrs. Jurewicz and the children moved out of the matrimonial home in March 2013 and into a newly constructed home at 8191 Churchville Road in Brampton.
[8] Prior to the date of separation, Mr. Jurewicz was a successful homebuilder and land developer.
[9] Mr. and Mrs. Jurewicz acquired several properties during their marriage. Most, if not all of the properties were placed in the name of Mrs. Jurewicz, including title to the matrimonial home at 8395 Creditview Road and title to her current residence at 8191 Churchville Road in Brampton.
[10] In addition, two other properties acquired by Mr. and Mrs. Jurewicz during the marriage were placed in Gabrielle’s name when each property was purchased, even though she was not of age at the time. One of those properties, 8265 Churchville Road in Brampton, is adjacent to the matrimonial home.
[11] Mr. Jurewicz has filed evidence that prior to the date of separation, he and Mrs. Jurewicz were in agreement that they would subdivide and develop the matrimonial home property together with the lot owned by Gabrielle. The plan was to develop these properties to build new homes to sell at a significant profit. Mr. Jurewicz states that he has the experience, expertise and contacts in the home building industry to develop the lands and to sell newly constructed houses. He has deposed that this plan would provide financial security in the future for both of the parties and their children.
[12] The parties arranged a line of credit with Parama Lithuanian Credit Union Limited in the amount of $700,000 in August 2005 that was secured against title to the matrimonial home. Mrs. Jurewicz is shown on the charge as the chargor and Mr. Jurewicz is shown as guarantor. According to Mr. Jurewicz, he and Mrs. Jurewicz had agreed that the funds available from the line of credit would be used as working capital to finance the subdivision and development of the real estate properties for the construction of new houses.
[13] Currently, there is no other charge against title to the matrimonial home.
[14] According to the affidavit of Mr. Jurewicz, Mrs. Jurewicz drew down the full $700,000 from the line of credit after the parties separated. Mrs. Jurewicz does not agree that the funds were to be used for financing to develop the matrimonial home property for the construction and sale of new houses. She also states that some of the money drawn from the line of credit was used by Mr. Jurewicz to pay taxes.
[15] Mr. Jurewicz commenced an application in the (Ontario) Superior Court of Justice at Brampton on November 18, 2013 to seek relief under the Family Law Act for, among other things, an equalization claim and claims made with respect to property held in the names of one or both parties. Gabrielle was named as an added respondent because of her ownership of the two properties registered in her name. Mrs. Jurewicz served an answer on March 6, 2014 and Gabrielle served an answer on March 20, 2014.
[16] In April 2014, Mr. and Mrs. Jurewicz agreed to move the proceedings to the mediation-arbitration process. In June 2014, they signed a mediation-arbitration agreement with Lorne Wolfson as the arbitrator. The mediation-arbitration agreement included paragraph 14.1(b) that provided for the ability of either party to appeal an award made under the agreement on a question of law or a question of mixed fact and law.
[17] On April 17, 2015, Mr. Wolfson made an interim award that granted, among other things:
(a) An award on consent that Mr. Jurewicz shall have interim exclusive possession of the former matrimonial home and that Mrs. Jurewicz shall have interim exclusive possession of 8191 Churchville Road.
(b) On consent, a mutual non-harassment order.
[18] On October 13, 2015, Mr. Wolfson heard motions brought by Mr. Jurewicz and Mrs. Jurewicz. In his motion, Mr. Jurewicz requested leave to amend his pleadings to claim unjust enrichment and a constructive trust, and/or resulting trust, and for an order to permit questioning. Mrs. Jurewicz brought a motion at the same time to seek an order for the listing and sale of the matrimonial home, transfer of RESP accounts, repayment of trust funds and further disclosure.
[19] On October 28, 2015, Mr. Wolfson released his interim award on those motions. Mr. Wolfson granted leave for Mr. Jurewicz to amend his application, an order permitting the listing of the matrimonial home for sale before trial, and an order that Mrs. Jurewicz attend questioning.
[20] On November 3, 2015, the parties attended before Mr. Wolfson to schedule questioning for December 7, 9 and 10, 2015, and to schedule the arbitration trial on all issues for the week of February 29, 2016.
[21] In his notice of appeal, Mr. Jurewicz seeks an order setting aside the interim award of Mr. Wolfson dated October 28, 2015 permitting Mrs. Jurewicz to list the matrimonial home for sale.
ANALYSIS
[22] The motion for a stay was heard on an urgent basis. The argument on both sides of the motion essentially came down to two issues:
jurisdiction; and
basis for a stay and whether a state should be granted.
Jurisdiction
[23] Mr. Jurewicz brings his motion for a stay under Rule 38(35) of the Family Law Rules. Rule 38(35) reads as follows:
(35) A temporary or final order may be stayed on any conditions that the court considers appropriate,
(a) by an order of the court that made the order;
(b) by an order of the Superior Court of Justice.
[24] Mr. Fehrle argues on behalf of Mr. Jurewicz that Family Law Rule 38 governs appeals in family law cases and gives this court jurisdiction to make orders in respect of an appeal of a family arbitration award that has been commenced in the Superior Court of Justice under section 45 of the Arbitration Act 1991. This jurisdiction includes authority to stay a temporary or final order on any conditions that the court considers appropriate. He argues that it would make no sense that the Superior Court of Justice would not have authority to stay an order under appeal if the absence of a stay would render the appeal moot.
[25] Mr. Benmor argues on behalf of Mrs. Jurewicz that Family Law Rule 38(46), being the rule that governs the appeal of a family arbitration award, does not provide the basis for jurisdiction Mr. Fehrle urges the court to find. Family Law Rule 38(46) expressly states that subrules 5, 8-21, 23 and 25-32 apply to the appeal of a family arbitration award under section 45 of the Arbitration Act 1991. Mr. Benmor makes reference to the significance that Family Law Rule 38(46) does not include Family Law Rule 38(35) in those rules applicable to the appeal of a family arbitration award to give power to the court to order a stay.
[26] In his reply submissions, Mr. Fehrle argued that Family Law Rule 38(46) was amended to add subrule (b) to provide that the reference to “the order or decision appealed from” shall be read as a reference to “the family arbitration award”. Using this reasoning, Mr. Fehrle submits that the court has jurisdiction to stay Mr. Wolfson’s interim award under Family Law Rule 38(35).
[27] Mr. Fehrle’s argument that the word “award” may be substituted for the word “order” in Family Law Rule 38(35) is answered by the very words of Family Law Rule 38(46) in which subrule (b) appears. That language limits the application of subrule (b) by the words “and, for the purpose”, referring to those subrules that expressly apply to the appeal of a family arbitration award pursuant to Family Law Rule 38(46). Those subrules do not include Family Law Rule 38(35).
[28] I have considered Mr. Fehrle’s alternative argument that section 106 of the Courts of Justice Act gives me authority to stay the award. Even though the appeal has been filed by Mr. Jurewicz to give the court power over the award for appeal purposes, the authority given by section 106 to stay a proceeding “in the court” does not, in my view, apply because the proceeding in the court at issue is the appeal itself. For this court to stay the appeal itself is surely not Mr. Fehrle’s intention when arguing the jurisdiction of this court to order a stay under section 106 of the Courts of Justice Act.
[29] The search for jurisdiction to make the order requested took me to the Family Law Act as section 50.1 of the Arbitration Act, 1991 mandates that “family arbitration awards are enforceable only under the Family Law Act.” Section 59.8(5) of the Family Law Act gives jurisdiction to this court to stay an interim application award pending appeal. Section 59.8 (5)(b) provides the court with the authority to make an order, on such conditions as are just, that enforcement of the award is stayed until the period has elapsed without an appeal, or until the pending proceeding is finally disposed of. However, upon a careful consideration of the language used by the legislature, I have concluded that section 59.8(5) applies only to a stay of the enforcement of an award by the court or by a third party. It is the enforcement of the award that an order can stay, not the award itself. Here, Mr. Wolfson’s order grants permission for Mrs. Jurewicz to list the property for sale. There is no enforcement to stay.
[30] The question of jurisdiction for an appellate court to make an interim order in the nature of a stay of the family arbitration award in issue finally lead me to consider the powers given to the Superior Court of Justice under the Courts of Justice Act as an appellate court. The Superior Court of Justice may exercise those powers as the court to which an appeal of a family arbitration award is taken under section 45 of the Arbitration Act, 1991.
[31] It is in section 134 of the Courts of Justice Act giving power to the Superior Court of Justice as the appeal court to which the appeal has been taken that I find the jurisdiction to grant a stay of the award if justified on the merits. Section 134 (2) permits the court to which an appeal is taken to make any interim order that is considered just to prevent prejudice to a party pending the appeal. I therefore consider this court to have authority under section 134 (2) to make the interim order in the nature of a stay that Mr. Jurewicz requests on his motion. The question therefore becomes whether he is entitled to this relief on the merits.
[32] The issue of whether Mr. Wolfson’s award was interim or final, and if there is a distinction to be drawn between an interim award and a final award for the purpose of seeking a stay was not argued before me. I therefore make no comment on that aspect of the issue.
Basis for Granting a Stay
[33] I propose to review the test for a stay as the basis to determine what prejudice, if any, Mr. Jurewicz may suffer pending appeal if the interim award is not stayed. Mr. Fehrle relies upon the decision of the Supreme Court of Canada in RJR-McDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 SCR 311 as the test for a stay. The court in RJR-McDonald revisited the three stage test developed in Manitoba (Attorney General) v. Metropolitan Stores (MTS) Ltd. 1987 79 (SCC), [1987] 1 SCR 110 as follows:
First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried.
Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused.
Finally, an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits.
[34] I accept that the threshold to determine whether there is a serious question to be tried is a low one. For present purposes, all that must be established is that the appeal is not vexatious or frivolous.
[35] Upon meeting the threshold that there is a serious question to be tried, a court is then required to consider the second and third tests. Justices Sopinka and Cory in RJR-McDonald directed that a prolonged examination of the merits on such a motion is generally neither necessary nor desirable, except in limited circumstances that would amount to exceptions to this rule. The first exception would arise if the result of the stay motion would in effect amount to a termination of the proceeding. The second exception would arise when a question of constitutionality that stands as a question of law alone would merit an in-depth analysis and where that outcome would determine the very question and make a stay unnecessary. In my view, neither exception to the general rule applies here.
Serious Question
[36] The question of whether there is a serious issue to be tried must be considered in the context of the appeal of the family arbitration award at issue. The question is therefore whether there is a serious issue that the arbitrator made an error of law or mixed fact and law when he awarded permission for Mrs. Jurewicz to list and sell the matrimonial home before trial.
[37] Mr. Jurewicz has alleged that Mr. Wolfson made an error in law or in mixed fact and law by concluding that the immediate listing and sale of the matrimonial home would not prejudice Mr. Jurewicz. Mr. Jurewicz argues that Mr. Wolfson did not address the specific grounds raised by Mr. Jurewicz for opposing an order for an immediate sale in his reasons. The specific grounds are set out in paragraph 44 of the factum Mr. Jurewicz filed on this motion.
[38] In paragraphs 9, 10 and 11 of his reasons, Mr. Wolfson discusses the law that relates to the rights of partition and sale of a joint owner. Although title to the matrimonial home is held in the name of Mrs. Jurewicz, there have been no findings made as of yet by the arbitrator that the Mr. Jurewicz holds any proprietary or beneficial interest in the matrimonial home.
[39] Failure to give meaningful reasons to permit an appropriate review of the correctness of a decision is an error of law and a ground for an appeal: R. v. Sheppard [2002] S.C.R. 869, 2002, SCC 26 (). It would appear from a reading of his reasons that Mr. Wolfson did not address various grounds raised by Mr. Jurewicz to oppose the motion for sale. Mr. Wolfson simply states at paragraph 12:
- I am satisfied that all of the circumstances of this case support an order for the immediate sale of the matrimonial home. The grounds raised by Eugene do not satisfy me that he would be prejudiced in the event of a sale. In the event that his claim for an interest in the matrimonial home is successful, that may influence how the net proceeds are to be divided. In my view, the sale of the house will remove a huge financial burden from this family, free up badly needed funds to support both parties and the children and fund whatever equalization payment is ultimately determined to be appropriate.
[40] Mrs. Jurewicz has a prima facie right to sell the matrimonial home as the sole owner on title, subject to the rights held by Mr. Jurewicz as a spouse under Part II of the Family Law Act. It would appear that Mr. Wolfson did not deal with those rights as part of his award. It may be an issue on appeal if the arbitrator should have considered those rights, and if the Partition Act was applicable at the time on the facts.
[41] It may be another issue on appeal whether Mr. Wolfson considered the evidence given by Mr. Jurewicz to properly exercise his discretion to make or refuse to make the order Mrs. Jurewicz requested.
[42] I find it to be an important consideration that Mr. Jurewicz was granted leave to amend his application to claim a constructive trust and/or resulting trust in the matrimonial home and other properties. The Supreme Court of Canada in Rawluk v. Rawluk, 1990 152 (SCC), [1990] 1 SCR 70 directed that before an equalization claim can be quantified under the Family Law Act, the court must first determine the net family property of each spouse by sorting that property into “ownership piles”.
[43] It is clear that that Mr. Jurewicz is claiming a property interest in the matrimonial home by making a trust claim. The existence, extent and amount of that trust claim will surely be an issue to be determined and “sorted” in the calculation process for an equalization payment one way or another. I would expect a centerpiece issue at the arbitration trial will be the nature and extent of the interest Mr. Jurewicz claims in the matrimonial home, whether it takes on a monetary form or if he can establish a beneficial interest of a proprietary nature to be considered an owner.
[44] The recent decision from the Court of Appeal in Korman v. Korman [2015] O.J. No. 4395 drew a bright line for cases that require a determination of title to property under section 10 of the Family Law Act by calling for the scrutiny of claims based on a constructive trust or resulting trust in the course of the equalization process. As the court explained at paragraph 29 in Korman, this exercise includes the crucial determination of any claim based on the statutory presumption of a resulting trust in property under section 14 for the court to make findings as to beneficial ownership where assets acquired during a marriage are held in the name of only one spouse.
[45] Having regard to these principles and all of the circumstances in evidence, I therefore find that Mr. Jurewicz has raised an issue for the proposed appeal that is neither vexatious nor frivolous. He has therefore met the threshold of establishing there is a serious issue to be determined on the appeal.
Irreparable Harm
[46] Mr. Jurewicz argues that he will suffer irreparable harm if a stay is not granted for three reasons. First, he has an interim order for exclusive possession of the matrimonial home and that is where he resides. There is no motion before the court to revisit that order under section 24 of the Family Law Act.
[47] Second, Mr. Jurewicz argues that if a stay is not granted, the listing and sale of the matrimonial home will pre-empt and overtake any relief he might obtain if he is successful on appeal.
[48] Third, Mr. Jurewicz relies upon evidence that he and Mrs. Jurewicz planned to subdivide and develop the matrimonial home property, together with the adjacent property owned by Gabrielle, in which he claims a constructive trust or a resulting trust. Mr. Wolfson accepted the evidence that the matrimonial home is a 6,351 square foot ravine estate on six acres of land. The value of this property could range from $2.5 million according to Mr. Jurewicz, to $4 million according to Mrs. Jurewicz. This evidence provides the basis for his argument that the matrimonial home has an inherently greater value as part of a land assembly to subdivide and to build new houses for sale than to sell the matrimonial home property now and in its current condition. A sale of the matrimonial home before trial will arguably take away the development potential of the property.
[49] Mr. Jurewicz argues that he will be deprived of the benefit of his claim for a constructive trust and/or resulting trust in the matrimonial home if it is sold before his proprietary claims are fully adjudicated in the context of the entire family law proceeding before Mr. Wolfson. More to the point, the determination of any beneficial ownership interest he holds in the matrimonial home at trial will also recognize whether Mr. Jurewicz is entitled to participate in any increase (or decrease) in the fair market value of the matrimonial home since the date of separation.
[50] Mrs. Jurewicz states that she will suffer irreparable harm if a stay order is granted because she requires financial assistance. She states that Mr. Jurewicz has not paid spousal support to her for approximately 18 months, and that he has allowed the matrimonial home to fall into disrepair. Mr. Jurewicz has also failed to pay municipal taxes to the City of Brampton in the amount of $61,313 and that he has failed to pay outstanding sewer costs of $10,960 since the parties separated. These are all legitimate concerns for Mrs. Jurewicz to have as the owner on title to the matrimonial home.
[51] Mrs. Jurewicz also states that it is necessary to sell the matrimonial home because she is responsible for making the payments of principal and interest on the $700,000 line of credit that is secured against the matrimonial home. She states that she alone has been making payments of $1,800 a month to the credit union on the line of credit.
[52] Mrs. Jurewicz takes the position that Mr. Jurewicz will not be prejudiced by the sale because the net proceeds would be deposited in trust and subject to further order of the arbitrator or the court. Mr. Benmor argues on her behalf that the matrimonial home will be sold in any event under the Partition Act even if Mr. Jurewicz is found to be a beneficial owner. This argument presupposes the outcome of the arbitration and is premature to make at this juncture.
[53] I am of the view that Mr. Jurewicz will suffer irreparable harm if the matrimonial home is immediately listed for sale and sold. His rights to have his trust claims litigated will be prejudiced if the matrimonial home is listed and sold before his appeal is heard. However, I am troubled by the evidence that Mr. Jurewicz has not paid municipal taxes or the sewer bills for the matrimonial home, despite having exclusive possession on an interim basis. He has allowed the matrimonial home to fall into disrepair. He has not made any contribution toward paying down the line of credit with the Parama Lithuanian Credit Union. His conduct, by act or omission, has resulted in putting Mrs. Jurewicz under financial pressure, and exposes her ownership interest in the matrimonial home to risk. The sale of the matrimonial home property today would relieve that financial pressure and risk.
[54] The evidence that Mrs. Jurewicz has made payments of principal and interest on the $700,000 drawn down on the line of credit has a bearing on the issue of irreparable harm. There is evidence that Mrs. Jurewicz may have drawn down that $700,000 from the line of credit. Whether she had exclusive use of that money since withdrawing that amount to create the debt or whether Mr. Jurewicz drew or otherwise received funds from the line of credit to meet obligations will be a matter for trial. Any payment of interest or reimbursement for the repayment of principle by one party on behalf of the other may be the subject of post separation adjustments.
[55] It is for these reasons that I granted a stay requested by Mr.Jurewicz, but only for a short time between this order and the earlier of the hearing of the appeal or the arbitration trial currently scheduled to start at the end of February, 2016, and subject to further order of the court.
Balance of Convenience
[56] I find that the balance of convenience in the short term favours Mr. Jurewicz. The argument about financial pressure that Mrs. Jurewicz is experiencing is countered by the evidence that shows Mrs. Jurewicz has now sold another property registered in her name at 7699 Creditview Road in Brampton for $765,000. The sale of this property was scheduled to close on November 25, 2015. The proceeds from this sale should alleviate the financial pressure on Mrs. Jurewicz for now, subject to any order or agreement between the parties that the proceeds of that sale shall be held in trust until further award of the arbitrator.
[57] I have concluded the balance of convenience narrowly favours Mr. Jurewicz because the sale of the matrimonial home might permanently impair his rights, contrasted with the temporary distress not listing the home for sale might cause to Mrs. Jurewicz. Any stay of Mr. Wolfson’s award must be seen in this light, and should be considered only a temporary reprieve to balance the equities between the parties pending the appeal or the trial, whichever comes first.
CONCLUSION
[58] Mr. Jurewicz has met the test for a stay under RJR-McDonald. I am satisfied on the evidence filed that he will suffer prejudice if a stay is not granted. An order will go to stay paragraph 1 of the family arbitration award of Mr. Lorne Wolfson, arbitrator, dated October 28, 2015 until the earlier of the appellant’s appeal of that arbitration award or the arbitration trial, subject to further order of the court on motion by either party.
[59] In view of the contrasting evidence heard on this motion, I consider it just to reserve the matter of the costs of this motion to the court hearing the appeal.
EMERY J
Released: December 10, 2015
COURT FILE NO.: FS-15-0256-00
DATE: 2015 12 10
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
EUGENIUSZ JUREWICZ
Applicant
- and -
WANDA JUREWICZ and GABRIELLE JUREWICZ
Respondents
REASONS FOR DECISION
EMERY J
Released: December 10, 2015