CITATION: Abi-Zahra v. Hendy, 2016 ONSC 4633
COURT FILE NO.: FC-15-170
DATE: 2016/07/15
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Nadia Abu-Zahra, Applicant
AND
Ashraf Hendy, Respondent
BEFORE: Madam Justice L. Sheard
COUNSEL: Emily Comor, for the Applicant
Gonen Snir, for the Respondent
HEARD: July 14, 2016
ENDORSEMENT
[1] The Applicant (“Wife”) brought a motion authorizing her to list and sell the matrimonial home (the “Home”), owned jointly by her and the Respondent (“Husband”), without the participation or consent of the Husband.
[2] The Husband brought his own cross-motion. He seeks to strike the Wife’s notice of motion and to postpone the listing of the Home until the settlement conference scheduled for August 30, 2016 or the trial scheduled for September 2016. Alternatively, if the Court orders the sale of the Home, the Husband asks that the price should be listed at a minimum price determined by an assessment done by a third-party assessor agreed upon by the parties, to take place prior to the August 30 settlement conference, and that any reasonable offer above or equal to the assessment shall be accepted. Also, he proposes that the net proceeds of the Home be kept in trust for the parties until a final equalization order is made, although the cost of repairing the Home for sale, the real estate commission and legal fees may be paid from the sale proceeds.
[3] The parties were married in 2005. They have two children aged almost five and three. They live with the Wife. The parties separated in 2014. The Wife remained in the Home. This matter was designated a high conflict case and has been cased managed by Madam Justice Warkentin.
[4] At the case conference conducted by Justice Warkentin on December 3, 2015 she made a number of orders including that the Wife was to have until December 21, 2015 to present an offer to purchase the Husband’s interest in the Home. If the Husband did not accept the offer, he was to have until January 7, 2016 to present his own offer to purchase the Wife’s interest in the Home.
[5] In his affidavit sworn June 7, 2016, the Husband states that:
(1) the Wife made an offer to buy the house and that he made a counteroffer on December 23, 2015; and
(2) on March 29, 2016 the Wife accepted his offer and agreed to sign an agreement regarding the sale of the Home. That agreement is attached as Exhibit F to the Husband’s affidavit. It provides in part that:
a. the parties have agreed that the current value of the Home is $480,000;
b. there is an existing mortgage of approximately $260,000;
c. the Wife shall receive 50% of the net equity of the Home, which was estimated at approximately $111,500;
d. the closing date was to be May 19, 2016;
e. as the Wife had been paying all expenses related to the carrying of the Home, the Husband’s contribution to the costs incurred by the Wife between the date of separation and the date of transfer was to be settled at a future date;
f. upon the transfer of the Home, the Husband will pay to the Wife approximately $111,500; and
g. the agreement will conclude the equalization of the Home subject to the allocation of its carrying expenses referred to above.
[6] In Paragraph 27 of his June 7, 2016 affidavit, the Husband states that during the process of obtaining a mortgage to complete the purchase he discovered that without a separation agreement stating his liabilities for child and spousal support, he could not obtain a mortgage. The Wife granted him an extension on the closing.
[7] On June 1, 2016 the Husband was approved for a mortgage. The closing was extended to June 2, 2016.
[8] The Wife filed an affidavit dated July 10, 2016, responding to the Husband’s affidavit. In it, she states that until receiving the Husband’s affidavit of July 7, 2016 she had never been advised that he had encountered any difficulty in obtaining a mortgage by reason of the lack of an assigned separation agreement or for any other reason.
[9] The Wife also filed an affidavit sworn June 16, 2016 in support of her motion. In that affidavit, she refers to correspondence between the Husband’s (then) lawyer in May 2016 by which time the Husband had failed to complete the purchase of the Home.
[10] On May 4, 2016 the Wife’s lawyer wrote to the Husband’s then lawyer confirming that she required the $110,000 from the sale of the Home in order to complete the purchase of a new home with her parents, into which she and the children and her parents were to move.
[11] On May 6, 2016 the Husband retained a new lawyer, Gonen Snir. By email on May 17, 2016 Mr. Snir confirmed that the Husband would like to complete the purchase of the house and asked for an extension of the closing to June 2, 2016 (Exhibit E to the Wife’s affidavit of June 16, 2016). The Wife was prepared to agree to the extension provided that she was given proof that the Husband had financing. On May 24, 2016 Mr. Snir advised that the Husband was handling the real estate issues by himself.
[12] On June 2, 2016 Justice Warkentin conducted another case conference by telephone. The endorsement sheet indicates that the conference was attended only by counsel, Ms Comor and Mr. Snir. Paragraph 2 of Justice Warkentin’s endorsement reads:
[2] Counsel for Mr. Hendy confirmed that his client has obtained mortgage financing in order to purchase Ms. Abu- Zahra’s interest in the matrimonial Home pursuant to an agreement the parties had entered into early this year. On that basis I make the following orders:
a) Counsel for Mr. Hendy shall provide Counsel for Ms. Abu- Zahra with the confirmation from the mortgage broker/company that Mr. Hendy has been approved for financing and the name of Mr. Hendy’s real estate lawyer on or before the end of the day tomorrow, June 3, 2016. This information shall be in writing.
b) If the transfer of the matrimonial home to Mr. Hendy has not been completed on or before June 17, 2016, Ms. Abu-Zahra may apply on an expedited basis for an order requiring the sale of the matrimonial home prior to trial. No other motion or cross-motion may accompany this motion in order that it may be heard quickly. The parties shall set out the basis for the sale including any agreements the parties entered into regarding the transfer to Mr. Hendy and the prejudice either of them has encountered as a result of the failure of Mr. Hendy to complete the purchase.
[13] By email dated June 2, 2016 Mr. Snir advised the Wife’s lawyer that the Husband had told him that he had been approved to purchase the house and had retained Wayne P. Smith as his real estate lawyer.
[14] The Husband did not complete the purchase of the house on June 2 or at any time after that date. As a the date of this motion, Mr. Snir advised that on Monday (July 11, 2016) his client had submitted documentation to the Bank showing his support obligations. Mr. Snir hoped and expected that within 14 days of July 11 the Husband would either have his financing in place or know that he could not get financing.
[15] On June 13, 2016 the Wife’s counsel wrote to Mr. Snir asking him for his availability for a motion between then and July 5 so that the Wife’s urgent motion to sell the house could be heard. Mr. Snir responded by email on June 14, 2016. His email reads, in part: “The information I received from Mr. Hendy is that they are advancing between the lawyers regarding the sale of the house, and that closing is within reach. Therefore I do not find any reason to have motion on the house.” (sic)
[16] On June 15, 2016 the Wife’s real estate lawyer advised that he had heard nothing from the Husband’s real estate lawyer after “reaching out to him on two occasions.”
[17] In her affidavit of June 16, 2016, the Wife states that she had relied upon the Husband’s agreement to purchase the Home and the $110,000 that she expected to receive from him on closing, and with her parents had purchased a house in Rockcliffe. The plan is that the parents, the Wife and the children would live in this house. The purchase was based on the Wife contributing the $110,000 from the sale of the Home. She would then pay monthly “rent” to her parents on a “rent-to-own arrangement.”
[18] The new house purchase was completed in May 2016. Without the Wife’s $110,000, her parents were forced to take out a line of credit and to pay interest. Also, as she has not been able to move out of the Home into the new home, the Wife has not been able to contribute toward the monthly expenses of the new house. That has caused additional financial hardship.
[19] The Wife and children have suffered other hardship as a result of the Husband’s failure to close the purchase:
(1) In anticipation of the move, in early May 2016 much of the family furniture was moved out of the Home into the new house. Since then, they have been left to live with minimal furnishings.
(2) An additional financial hardship caused by the Husband’s failure to complete his purchase of the Home relates to the mortgage on the Home. The Wife states that the mortgage came up for renewal in late May 2016. She had expected that the mortgage would be automatically renewed. The Husband did not sign the renewal. As a result, the mortgage was rolled into a six-month open term at an annual interest rate of 6.2%. That new mortgage rate translates to an extra $589.87 per month in mortgage payments, to be paid by the Wife, who resides in the house.
[20] The Husband’s affidavit dated July 7, 2016 (which appears to have been sworn on June 7, 2016, Volume 2 of the Continuing Record, Tab 6) does not provide a satisfactory explanation for his failure to complete the purchase of the Home. It was reasonable for the Wife to expect, as any seller would, that the buyer had already obtained financing before making the offer. The Husband’s eleventh-hour explanation for his inability to complete the purchase is too little, too late. I conclude from his conduct and also from the relief sought in his cross-motion, that the Husband has not behaved reasonably and that the proper and fair resolution is to grant the Wife’s motion and to dismiss the Husband’s cross-motion.
[21] I have not fully set out the basis for the Husband’s cross-motion or the evidence set out in his supporting affidavits. I have considered those and find there is no merit to his cross-motion. I also note that it appears to have been improperly brought given the Order of Justice Warkentin. However, I do wish to address one issue respecting the alleged non-payment of the costs awarded by Justice Phillips in July 2015, which were to be paid by the Wife. The Husband argues that the non-payment of those costs justifies the striking of the Wife’s motion.
[22] By way of an email exchange between counsel for the Wife and then counsel for the Husband, an agreement was reached whereby the parties agreed that any outstanding costs owed by the Wife could be deducted from her share of the house proceeds. I conclude that the Husband has agreed to that arrangement and that the Wife’s costs will be taken into account, together with any other amounts that need to be adjusted with respect to the equalization of the parties’ net family properties.
[23] At the hearing, the Husband’s counsel advised that he hoped and expected his client would get full bank approval and would be in a position to close the purchase within 14 days of the date of the motion. That would be July 28, 2016. I advised counsel that I intended to grant the Wife’s motion and that I was considering whether to postpone the implementation of the order for 14 days in order to allow the Husband one last chance to obtain financing and to complete the purchase as per his offer. The Wife expressed concerns with any further delay.
[24] The Wife is concerned that any delay in her ability to prepare and list the Home for sale will prejudice her financially. Also, the children will be starting new schools in the fall and need to get settled in their new home in Rockcliffe. Therefore, there is some urgency to getting the house sold.
[25] Further, the Wife has been advised by her real estate agent that there are certain repairs that must be done to the Home before it can be shown to prospective buyers. That work needs to get started immediately. The Wife is concerned that she will spend money to do these repairs and then, if the Husband decides to complete the purchase, she will be out of pocket those costs. The Wife did not have a budget for those repairs.
[26] Based on the materials before me, I have serious doubts that the husband will cooperate in the listing and sale of the house. In addition, I am told that there are criminal proceedings against the husband relating to the wife, which impose restrictions on him with respect to his access to the wife. That is another factor that weighs in favour of an order granting the relief sought by the wife.
[27] In his cross-motion materials, the Husband asserts that the Home should firstly be appraised by a third-party appraiser agreed upon between the parties. At the hearing, I allowed the Wife to file her affidavit dated July 13, 2016 which attached the appraisal report of Shore Tanner Associates for 237 Goulburn Avenue, Ottawa. His appraisal was conducted as at July 7, 2016 and he valued the property at $525,000, being the midpoint of his estimated range of between $500,000 500 and $550,000.
[28] I note that the agreement entered into by the parties valued the Home at $480,000. In his July 7, 2016 affidavit the Husband stated that he had an appraisal done by Chan Cappuccino which valued the house at $520,000 as at June 2014.
[29] Based on all the evidence before me, I am satisfied that the wife has taken reasonable and proper steps to determine the estimated fair market value of the home and that her appraisal is within the expected and appropriate range.
Decision
[30] I make the following orders:
(1) The Husband’s cross-motion is dismissed.
(2) The Husband may have until July 28, 2016 to complete his purchase from the Wife of the Home, and except as is otherwise ordered herein or agreed by the parties, shall do so on the same terms and conditions as set out in the Partial Interim Separation Agreement signed by the Husband and the Wife and dated March 29, 2016 (marked as Exhibit F to the Husband’s affidavit dated July 7, 2016, Volume 2 of the Continuing Record, Tab 6F) (“the Agreement”). For clarity, the Husband must have completed all things required of him under the Agreement price by the “closing date,” which is to be no later than July 28, 2106.
(3) Notwithstanding paragraph (2) above, the Wife is free to immediately begin the work that is necessary to get the Home ready to market and list for sale as outlined in the email from Michael Gennis to the Wife dated July 7, 2016, and filed as an Exhibit in the Wife’s motion.
(4) If the Husband does close the purchase on July 28, 2016, any amounts incurred by the Wife in readying the house for sale, as recommended by Michael Gennis, shall be reimbursed to the Wife by the Husband forthwith upon the transfer to the Husband, which amounts are to be paid to the Wife in addition to any other amounts that the Husband is obliged to pay to the Wife upon the transfer.
(5) After July 28, 2106, and assuming the Husband has not completed the purchase of the Home by that date, the Wife may list the Home for sale at a list price to be determined by her, acting reasonably and in consultation with a real estate agent chosen by the Wife. The list price may be dropped from time to time at the sole discretion of the Wife if the property is not selling. Any reasonable offer shall be accepted and the Wife shall have the sole authority to accept the offer and to bind the Husband on the agreement of purchase and sale. The Wife is also hereby authorized to sign whatever consents or authorizations or other documents as may be required to complete the transfer and to convey good and proper title of the Home.
(6) The Wife will manage the listing and sale of the Home without the need for the Husband’s cooperation or consent and will be able to accept any offer of sale that she deems reasonable, and she is hereby authorized to complete the sale of the Home without the Husband’s consent or signature.
(7) After payment of the joint mortgage, real estate fees, legal fees related to the sale, outstanding property taxes and utilities, and any other reasonable amounts owing, the Wife shall be paid $110,000.00 from the proceeds of sale of the Home and any amounts reasonably spent by the Wife to ready the Home for sale.
(8) The Wife is also entitled to recovery of any additional costs or expenses she has incurred by reason of the Husband’s failure to complete the purchase of the property including, but not limited to, any costs incurred to replace the $110,000 financing, whether directly by the Wife or indirectly by the Wife’s parents on her behalf; the extra mortgage payments that she was required to pay by virtue of the failure or refusal of the Husband to renew the mortgage; and any other expenses that she might seek to claim that resulted from the Husband’s failure or refusal to complete the purchase as per the Agreement of March 29, 2016. The amounts to be paid to the Wife shall be determined either by agreement or by the Court and shall either be paid from the net sale proceeds of the Home, be held in trust or taken into consideration when determining an equalization payment between the parties.
(9) The balance of the proceeds of sale of the Home, after payment to the Wife of the $110,000.00 and the other amounts to be paid to her from the net sale proceeds of the Home as per the terms of this Order, shall be held in trust pending final resolution of all of the financial issues in this matter and as security for amounts (to be determined) as may be owing by the Husband to the Wife as his share of the Home expenses since the date of separation and the children’s child care and other extraordinary expenses, as well as other amounts as may be owing to the Wife (including costs) and determination of any equalization payment.
(10) The Wife shall have her costs of this motion. If the parties cannot agree on costs, then they may make submissions in writing, not to exceed three pages plus a Bill of Costs, within 14 days of the date of this order. If the Home is sold to a third party buyer, the costs of the motion shall be paid to the Wife from the net sale proceeds of the sale of the Home.
Madam Justice Liza Sheard
Date: July 15, 2016
CITATION: Abi-Zahra v. Hendy, 2016 ONSC 4633
COURT FILE NO.: FC-15-170
DATE: 2016/07/15
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Nadia Abu-Zahra, Applicant
AND
Ashraf Hendy, Respondent
BEFORE: Madam Justice L. Sheard
COUNSEL: Emily Comor, for the Applicant
Gonen Snir, for the Respondent
ENDORSEMENT
Sheard J
Released: July 15, 2016