Superior Court of Justice - Ontario
CITATION: Gupta v. Gupta, 2016 ONSC 6506
COURT FILE NO.: FS-11-73067
DATE: 2016 10 19
RE: Mona Gupta, Applicant
AND:
Tarun Gupta, Respondent
BEFORE: Fairburn, J.
COUNSEL: R. Fernandes, Counsel, for the Applicant
S. Moss and K. Paynter, Counsel for the Respondent
HEARD: September 22, 26, 2016
ENDORSEMENT
(A) Overview
[1] The parties jointly own a property in New York City. This property sits at the centre of Mr. Gupta’s motion to have Ms. Gupta held in contempt. He says that she has failed to comply with two prior court orders that require her to sell the property in a “timely” fashion. Mr. Gupta says that Ms. Gupta has well exceeded any definition of “timely”.
[2] Ms. Gupta says that Mr. Gupta misreads the prior court orders. She has never been ordered to sell the property, let alone in a “timely” way and, even if she has been, “timely” does not mean what the applicant says. She says that the contempt motion should be dismissed. In addition, she brings a motion to stay all future proceedings commenced by Mr. Gupta until he satisfies the outstanding costs orders made by this court.
[3] These are my reasons for dismissing the contempt motion and granting Ms. Gupta’s request for relief.
(B) A Brief History
[4] The parties have two children who were born in 2005 and 2008. The couple separated not long after the second child was born. Parenting issues were resolved in the Ontario Court of Justice in 2010. Ms. Gupta was granted final sole custody of the children. The parties came to this court to resolve other matters, including property issues.
[5] On July 13, 2013, Tzimas J. made an order in accordance with minutes of settlement. Among other things, the parties agreed to the listing for sale of certain properties, including a property they held in New York City: #11A – 30 West 61st, New York. On November 21, 2013, Bielby J. made a temporary order that also referenced the New York property. Certain terms were imposed, including that the parties consented to listing the property for sale “forthwith” and what real estate agent would be used.
[6] On March 5, 2014, Barnes J. made a final order in respect to a number of things, including striking Mr. Gupta’s Answer-Claim and permitting Ms. Gupta to proceed to an uncontested trial. Justice Barnes also made the following order in respect to the property:
The Respondent/father’s … approval, consent or signature on any and all documentation necessary to facilitate the sale of the property municipally known as #11A – 30 West 61stst, New York, New York, 10016, shall be, and the same is hereby, dispensed with. The Applicant/mother, Mona Gupta, shall be, and she is hereby, allowed to sign any and all documentation on behalf of both parties, in order to carry out the timely sale of the property … [emphasis added].
[7] In his written reasons, Barnes J. noted that the sale of the New York property, and others, were “necessary to settle many of the outstanding financial issues between the parties.” To Barnes J., it was “apparent” that the parties were unable to cooperate on these matters.
[8] Justice Sproat presided over the uncontested trial. He issued a final order on April 28, 2014. Among other matters, Sproat J. ordered that Barnes J.’s March 5, 2014 order respecting the New York property continue in “full force and effect”. With minor variations, of no import to this application, Barnes J.’s order was repeated.
[9] Mr. Gupta was ordered to pay a lump sum of child support in the amount of $454,352.00 “from his share of the net proceeds resulting from the sale” of the New York property. The parties were ordered to equally contribute to the ongoing cost of the property until such time as it was sold. The order went on: “During the interim, the Applicant/mother shall be permitted to rent the New York Property on such terms as she sees fit, and all rental income derived therefrom shall be directed and made payable to her.”
[10] Over two years later, the property still has not been sold.
(C) Steps Taken in Relation to the New York Property
[11] Ms. Gupta acknowledges that she and Mr. Gupta each own a 50 percent legal interest in the property. She filed an affidavit responding to the suggestion that she has been obstructing its “timely” sale. She says that she has made significant efforts to sell the property. As it is the most valuable asset of the marriage, she says it is imperative to secure as high a sale price as possible.
[12] Her efforts to sell the property have included retaining a real estate agent in New York City in January 2014. The property sat empty while efforts were made to sell or lease. After 5 months, 10 open houses and 20 viewings by prospective purchasers, only one offer had been received and it fell well below the asking price. The Guptas jointly agreed to rent the property for $4,600.00 per month. It was rented right up until March 31, 2016.
[13] In January 2016, Mr. Gupta recommended by email that the property be kept “indefinitely” and that they manage it “together” and split the monthly cash flow. He suggested the possibility of taking out a home equity line, renovating the apartment, and obtaining a higher rental price.
[14] Ms. Gupta retained a realtor to sell or lease the property. Multiple showings occurred over 2 months, yet no offers to purchase were received. In April 2016 a couple offered to lease the property for two-years. Mr. and Mrs. Gupta entered into the lease agreement, set to expire in May 2018. Mr. Gupta signed the agreement on April 13, 2016.
[15] Six days after he signed the agreement, Mr. Gupta attempted to withdraw his consent. He sent an email to the property manager saying that he was “under the wrong impression” and no longer consented to the rental. He asked that his consent be withdrawn. By that point, though, the lease had been approved by the Board of Directors.
[16] Ms. Gupta says that it is not a good time to sell the property given that, among other things, there is a good deal of construction nearby and this has caused a downturn in the appeal of the area. She will continue to liaise with the agents in New York and intends to sell the property when the right return can be obtained.
[17] I accept all of these facts as true.
(D) Mr. Gupta Says That Ms. Gupta Was “Ordered” to Sell
[18] Mr. Gupta takes the position that since July 31, 2013 (the date of the Tzimas J. consent temporary order), Ms. Gupta has been under a court order to sell the property. He says she has had “full reign” over selling the property and not shown any desire to do so. He acknowledges that he owes child support in the amount of $454,352. He also acknowledges that he owes other support, an equalization payment and costs. After interest is calculated, he estimates that his costs are around $70,000. In the end, Mr. Gupta says that he owes about $945,000 to Ms. Gupta and that this can only be cured by forcing her to comply with the orders of Sproat and Barnes JJ., requiring her to sell the property.
[19] Mr. Gupta alleges that Ms. Gupta is simply refusing to sell the property because it will put him in “good standing” on all of his arrears. He alleges that his ex-wife does not want this to happen because she is trying to punish him. He argues in his affidavit that Ms. Gupta takes any opportunity she can to try and paint him in a bad light. He has received an estimate as to the value of the property at $1,490,000.00 USD.
(E) Allegation of Contempt
(i) Overview
[20] Mr. Gupta argues that the terms of the prior orders are clear. He says that Ms. Gupta was, in essence, required to sell the property right away. This is his interpretation of the word “timely”. Regardless, on any of the many definitions put forward, he says that Ms. Gupta is well in breach of them and should be held in contempt. He says that the orders of Barnes and Sproat JJ. are unequivocal. He says it is a wilful and deliberate attempt to disregard this court’s orders in an effort to “punish” him and that this is contemptuous.
[21] In oral submissions, Mr. Gupta’s counsel made the point that he is not looking for his ex-wife to be jailed as a consequence of her purported contempt. Rather, the remedy he seeks is that she comply with the prior orders and sell the property, at which time he says the contempt can lift.
[22] Ms. Gupta says that “timely” means when matters are “opportune” and, given the challenges in selling the property, it has not yet been opportune to sell. Moreover, she says that she is not in contempt because the orders do not require her to sell the property.
(ii) The Power of Contempt
[23] Civil contempt remedies may be imposed where a party fails to comply with a court order: Family Law Rules, r. 31(1).
[24] Civil contempt has three elements that must be proven beyond a reasonable doubt. The reason for the heightened burden of proof on the party alleging contempt rests on the fact that penal consequences can accompany a finding of contempt: Bell ExpressVu Ltd. V. Torroni, 2009 ONCA 85, at para. 22. As noted by the court in Chiang (Trustee of) v. Chiang, 2009 ONCA 3, at para. 11: “civil contempt bears the imprint of the criminal law” and, therefore, must be made out on a criminal standard of proof.
[25] The three elements for civil contempt were reviewed by Cromwell J. in Carey v. Laiken, 2015 SCC 17, at paras. 32-35. They involve the following:
a. The alleged contemnor must have breached an order that “clearly and unequivocally” states what should or should not be done.
b. The alleged contemnor must have knowledge of the order. Knowledge may be inferred from the circumstances. It can also be proven on the basis of wilful blindness.
c. The alleged contemnor must have intentionally committed the prohibited act or failed to do the required act.
[26] The contempt power is a discretionary one. Caution is the guiding principle when courts are asked to consider exercising the power of contempt. The power is one of last resort and should only be used, particularly in family law cases, where there are no other adequate remedies available: Hefkey v. Hefkey, 2013 ONCA 44, at para. 3; Fiorito v. Wiggins, 2015 ONCA 729, at para. 16. As noted in Hefkey, at para. 3, contempt findings should be made sparingly and only as a “last resort”. Moreover, as noted in Vidéotron Ltée v. Industries Microlec Produits Électroniques Inc., 1992 CanLII 29 (SCC), [1992] 2 S.C.R. 1065, at para. 23, the contempt power cannot and should not be reduced to a “simple means of enforcing judgments”. See also, Carey, at para. 36.
(iii) Findings Regarding Contempt
[27] Mr. Gupta’s motion falls far short of establishing that Ms. Gupta is in contempt of either of the prior court orders.
[28] Justice Sproat ordered that all temporary orders made throughout the course of the proceedings would be vacated. Therefore, his order, and that of Barnes J. (also a final order), are the only ones that impact the New York property.
[29] Ms. Gupta was not ordered to sell the New York property. Indeed, from a jurisdictional perspective, and without deciding the point, I question whether any such order could be made. While there are authorities that seem to decide this issue in different ways, I find the reasoning in Aning v. Aning, 2002 CanLII 78071 (ON SC), [2002] O.J. No. 2469 (Sup. Ct.), at paras. 22-24 and Bennett v. Bennett, [2001] O.J. No. 224 (Sup. Ct.) of some interest.
[30] I need not decide the issue here, though, because neither Barnes J. nor Sproat J. required Ms. Gupta to sell the property. Instead, their orders granted her with the ability to sign documentation on behalf of both parties so that she could carry out a timely sale of the property. The critical wording is as follows: “she is hereby, allowed to sign any and all documentation on behalf of both parties, in order to carry out the timely sale of the property … [emphasis added].”
[31] There is nothing in the order directing her to carry out an immediate sale of the property. There is nothing in the order directing her to sell the property. One reasonable reading of the order is that when the time comes to sell the property, whenever that may be, Mr. Gupta’s approval, consent and signature need not be obtained so that the sale can be accomplished in a timely manner.
[32] The first prong of contempt is not about trying to ascertain what the judge meant when he or she made the order. It may or may not be that Barnes and Sproat JJ. meant that the property should be sold right away. And it may or may not be that they thought the property would be sold right away. That is neither here nor there. For purposes of contempt, the question is whether the order states “clearly and unequivocally” that the alleged contemnor must do what she is alleged not to have done. This must be proven beyond a reasonable doubt. Mr. Gupta’s position falls well short of the mark on this point.
[33] While I need not go further, I do note that while Ms. Gupta had knowledge of the court orders, even if they could be interpreted as having “clearly and unequivocally” required her to sell the property, she did not intentionally fail to do so. Mr. Gupta’s own position, and his complicit behaviour up until the spring of 2016, belies any suggestion of intention, let alone on a standard of proof beyond a reasonable doubt.
[34] Mr. Gupta himself has been involved in discussions about renting out the property and, in fact, he signed the new leasing agreement in April of this year, leasing the property until May of 2018. He also sent Ms. Gupta an email earlier this year suggesting that they continue on this path of renting out the property. If Ms. Gupta is in breach of the prior court orders, then Mr. Gupta is, at a minimum, an aider and abettor to that breach. Respectfully, to suggest that she intentionally defied a clear and unequivocal order in circumstances where Mr. Gupta has been inextricably linked to the purported defiance, rings somewhat hollow.
[35] In the end, I am not satisfied beyond a reasonable doubt that the first and third elements of the test for civil contempt have been made out. The motion is dismissed.
(F) Ms. Gupta’s Motion to Stay Future Proceedings
[36] Ms. Gupta says that all future proceedings should be stayed until such time as Mr. Gupta satisfies outstanding costs orders.
[37] A costs order must be paid before a party can proceed further before the court. A failure to obey an order for costs may lead to an order staying proceedings on a temporary basis until such time as the costs are paid and compliance is shown with prior court orders: Munro v. Canada, 1994 CanLII 7517 (ON SC), [1994] O.J. No. 2808 (Gen. Div.) [also indexed under Kelly et al. and Hays et al.]; Family Law Rules, r. 1(8); Courts of Justice Act, s. 106. This is a matter of discretion.
[38] While Mr. Gupta says that he cannot afford to pay his costs (or other obligations under prior court orders) because the New York property has not been sold, he provided no meaningful, objective financial information to support this claim. Other than his bald assertion, there is nothing to suggest that Mr. Gupta is impecunious.
[39] Mr. Gupta has a motion before this court for November 9, 2016, seeking all manner of relief, including requiring Ms. Gupta to sell the New York property, prohibiting her from renting the premises, and to set aside and change aspects of Sproat J.’s order arising from the uncontested trial. This will be a detailed and expensive motion, seeking to re-litigate much of what was determined by Sproat J. in the context of the uncontested trial.
[40] Mr. Gupta’s pending motion, and all further motions that may be brought by him, are stayed pending his payment of all previous costs orders.
(G) Costs
[41] Unless the parties can agree, I will take written costs submissions from each of no more than 3 pages length. Ms. Gupta will provide her submissions within 14 days of release of this endorsement. Mr. Gupta will respond within 7 days of receipt of Ms. Gupta’s submissions.
Fairburn, J.
Date: October 19, 2016
CITATION: Gupta v. Gupta, 2016 ONSC 6506
COURT FILE NO.: FS-11-73067
DATE: 2016 10 19
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Mona Gupta, Applicant
AND:
Tarun Gupta, Respondent
BEFORE: Fairburn, J.
COUNSEL: Robert Fernandes, Counsel, for the Applicant
Sherri Moss, Counsel for the Respondent
ENDORSEMENT
Fairburn, J.
DATE: October 19, 2016