CITATION: Benarroch v. Abitbol et al, 2017 ONSC 4604

NEWMARKET COURT FILE NO.: FC-15-49325-00

DATE: 20170731

SUPERIOR COURT OF JUSTICE – ONTARIO – FAMILY COURT

RE: Alberto Benarroch, Applicant

and

Monique Abitbol, Carlos and Sara Abitbol, Jacob Benarroch, Louis R. Montello, HPI Administrative Services LLC, Hercules Products Inc., Turnberry TS2 Corp., Miami Alone Products Corp., Plasticos Hercules CA, Productos Hercules, CA, Las Princesas Corp., and Rafael Benarroch, Respondents

BEFORE: The Honourable Mr. Justice R. Kaufman

COUNSEL: The Applicant - not participating in this Motion

Stephen Brunswick, Matthew Sokolsky, and Jaret Moldaver for the Respondent Monique Abitbol

and

Scott Gfeller, for the Respondents Jacob Benarroch, Louis Montello, HPI Administrative Services LLC, Hercules Products Inc., Turnberry TS2 Corp., Miami Alone Products Corp., Plasticos Hercules CA, Las Princesas Corp., and Rafael Benarroch

HEARD: March 29, 2017

ruling on motion

Introduction

[1] The applicant and the respondent Monique Abitbol (“respondent wife”) were married on August 17, 1994. The applicant maintains a date of separation of November 29, 2013 and the respondent wife maintains a separation date of March, 2013.

[2] They are the parents of six children ranging from 20 to 9 years of age (twins). According to the pleadings, all of the children reside with the respondent wife.

[3] The applicant issued his Application on October 5, 2015. In it, he claims to be a dual Canadian and Venezuelan citizen but resident of Caracas, Venezuela. He claims relief including a divorce, an equalization of net family property, custody of the children and trust claims in relation to various properties situated in Thornhill as well as a cottage property in Port McNicoll.

[4] The applicant’s Financial Statement sworn October 1, 2015 indicates an annual income in the preceding year in the amount of $35,936. He claims to have either actual or constructive interests in realty, valuing his share in the amount of $5,623,000. There are eight vehicles listed in his Statement valued at approximately $230,000 including a Porsche, Lincoln Navigator and two Hummers together with a yacht valued at $225,000. The Statement indicates that at separation the applicant had no funds in the bank and that he had debt totalling in excess of $26,500,000 which had grown to an amount in excess of $30,900,000 at the date of the Statement.

[5] The respondent wife has delivered an Answer dated November 24, 2015. In it she seeks as against the applicant a divorce, custody of the children, child and spousal support, an equalization (or unequal division) of net family property and various trust claims. In addition as against the applicant and other respondents she seeks preservation and restraining orders as well as declarations that the other respondents hold properties in trust for the applicant.

[6] In her Financial Statement dated November 24, 2015 the respondent wife claims to be unemployed with income in the previous year of approximately $24,000. She claims monthly expenses in excess of $60,000. She indicates realty holdings of $7,300,000 and no debt other than contingent disposition costs of the realty.

[7] The parties view their lifestyle enjoyed during marriage from different perspectives. The applicant father describes it as comfortable but not extravagant whereas the respondent mother describes it as one of extravagance. The applicant maintains the family lifestyle was funded by parental loans and additional loans from friends; the respondent alleges that the applicant has arranged his affairs to insulate himself from creditors by placing most of his assets in names of others. The applicant initiates the current litigation in which he claims an equalization of net family property together with various trust claims regarding property within the jurisdiction of this court; the respondent responds with her similar claims for relief including the value of property outside of the jurisdiction of this court.

Litigation Background

[8] On November 26, 2015 Justice Rogers granted an ex parte Mareva injunction pursuant to section 101 of the Courts of Justice Act[1], Rule 40 of the Rules of Civil Procedure[2] and pursuant to Rule 1(7) of the Family Law Rules[3] prohibiting amongst others, the applicant, the individual respondents Jacob Benarroch (“Jacob”) and Louis R. Montello (“Louis”) and Raphael Benarroch (“Raphael”) and the respondent corporate entities HPI Administrative Services LLC (“HPI”), Hercules Products Inc. (“Hercules”), Turnberry TS2 Corp. (“TS2”), Miami Alone Properties Corp. (“Alone”), Plasticos Hercules CA (“Plasticos”), Productos Hercules CA (“Productos”) and Las Princesas Corp. (“Princesas”) from transferring, alienating, assigning, mortgaging, encumbering, pledging, disposing of, or otherwise dealing with any property of any kind in any jurisdiction worldwide in which the respondents (to be added) may have a direct or indirect, legal or beneficial interest pending further order of the court.

[9] The court also granted an injunction against Louis and Princesas with respect to the property known as 296 South Parkway PW, Golden Beach, Florida with the injunction to be registered on title subject to the approval of the court in the jurisdiction where the property is situate.

[10] The court also granted an injunction against TS2, Jacob and Raphael with respect to property known as 19707 Turnberry Way, Apt. TS-2 in Aventura, Florida with the injunction to be registered on title subject to the approval of the court in the jurisdiction where the property is situate.

[11] The court also granted a preservation and restraining order against the applicant pursuant to sections 12 and 40 of the Family Law Act.

[12] On December 15, 2015 Justice Rowsell presided on the return of the Motion originally before Justice Rogers and maintained parts of the Order of Justice Rogers. Specifically, Justice Rowsell made the following Order:

a. continued the injunction against Hercules, Plasticos, Productos and Princesas with respect to worldwide assets;

b. narrowed the injunction against Louis and Princesas by limiting it to the Golden Beach property in Miami-Dade County;

c. granted an injunction that prohibited Jacob and Louis from dealing with any property in any jurisdiction worldwide in which the applicant may have a direct or indirect, legal or beneficial interest;

d. deleted part of the injunction that impacted the Turnberry property, HPI and Alone;

e. continued the injunction against the applicant except for his use of funds to pay for his living expenses, any travel expenses to Toronto and any expenses associated with this litigation; and

f. added to the injunction by prohibiting Jacob, Louis and Rafael from transferring, alienating, assigning, mortgaging, encumbering, pledging, disposing of, or otherwise dealing with any property of any kind in any jurisdiction worldwide in which the applicant may have a direct or indirect, legal or beneficial interest, pending further order of the court.

[13] In addition, Justice Rowsell provided that the Order of Justice Rogers may be scheduled for further review on a date to be set with the Trial Coordinator upon the added respondents filing Affidavit material.

[14] When the case proceeded before Justice Rowsell, that court relied upon a Decision of Justice Perrell[4] regarding the appropriate test for a Mareva injunction. In that case the court held that the moving party must establish three components:

a. a strong prima facie case;

b. that the defendant has assets in the jurisdiction; and

c. that there is a serious risk that the defendant will remove property or dissipate assets before judgment.

[15] Justice Rowsell concluded that he was satisfied that the requirements of a Mareva injunction are met with respect to certain properties subject to further materials being filed.[5] Justice Rogers, in her Endorsement of November 26, 2015, found that the respondent wife has established that there is a strong prima facie case, that there are assets outside of Canada beyond the jurisdiction of this court. Both Justices came to the same conclusion albeit that Justice Rowsell had the added benefit of reading responding material from the applicant and oral argument from counsel representing Jacob. None of the responding arguments (either written or oral) challenge the respondent’s substantive allegations and evidence with respect to ownership and alleged diversion of assets to defeat her ability to enforce an equalization order. They have not yet cross-examined the respondent on her numerous Affidavits filed in this proceeding. Although Justice Rowsell contemplated that a further review will be required if any of the moving respondents choose to file responding material, no materials have yet been filed with respect to the substantive allegations advanced by the respondent.[6]

[16] There is ongoing litigation arising from the marital breakdown being conducted in the State of Florida simultaneous with the Ontario litigation. Of note, following the hearing of this Motion, counsels for the respondent and the added respondents Hercules, Plasticos, Princesas, Jacob and Louis wrote to me on April 18, 2017, advising that unbeknownst to the counsels, Princesas had brought a Motion before the Florida Court on March 21, 2017 to dismiss part of the respondent’s claim against it in the Florida litigation. Within the Decision of the Florida court,[7] there is reference to the Canadian proceedings and an acknowledgement provided to the Florida court by Princesas that it does not object to the Florida Court’s enforcement of the Mareva injunction as a matter of comity. In addition there is further mention that Princesas has no objection to the Florida Court’s enforcement of rulings made by the Ontario Court as to assets, individuals and entities within the Florida jurisdiction as a matter of comity. As indicated by Mr. Gfeller in a follow up telephone conference, in essence, his clients in Florida do not agree with the jurisdiction of the Ontario court but they will honour it and will not move in Florida to set it aside.

[17] In the applicant’s Affidavit sworn March 15, 2017 he states that his father and a close family friend David Avan have advanced significant funds to enable his family and the respondent’s parents to enjoy an affluent lifestyle while ensuring that at the same time his father (Jacob) and Mr. Avan were able to remove some money from Venezuela. He states that the funds transferred by Mr. Avan to the Abitbol family total $6,344,340 USD although the applicant lists these funds as a personal debt on his Financial Statement. Subsequently Mr. Avan has commenced an action against the parties and the respondent’s parents in the Superior Court of Justice in Toronto[8] claiming the return of $6,334,340 USD plus agreed-to interest. The Application alleges a series of oral agreements, based on handshakes including terms that the funds would be advanced as directed by the applicant Alberto, he would pay a reasonable interest rate later agreed to at United States prime plus 2% compounded on an annual basis with the loans being due on demand, later agreed to within seven days of written demand. Pursuant to these oral agreements, funds were advanced from January, 2010 until August, 2012 totalling $6,344,340 USD. On or about January 29, 2016 Mr. Avan and Alberto memorialized the loan agreements into a written contract. The claim against the respondent and her parents is premised on their knowledge, imputed or otherwise, that the loaned funds advanced to them were intended to be held in trust.

Argument

[18] The moving parties (being Jacob, Louis, Hercules, Plasticos and Princesas) before me seek to set aside the two interlocutory Orders granted by Justices Rogers and Rowsell on the grounds that the moving parties are all foreign parties, with no connection to Ontario and that the court has thus exceeded its jurisdiction in assuming authority over the moving parties and issuing Mareva injunctions against them. They argue that there are no presumptive connecting factors to give this court personal jurisdiction over the moving parties.

[19] The thrust of the moving parties’ argument is that there are judicial constraints imposed by the inability to fairly and effectively supervise the Orders of injunctive relief granted by the courts by virtue of the facts that the moving parties have not attorned to the jurisdiction of the court and that they are all foreign-based without any connection to Ontario. In essence they submit that Ontario does not have jurisdiction to grant a Mareva injunction over the foreign-based parties or their assets. They argue that there are no presumptive connecting factors to give the Ontario court personal jurisdiction over the moving parties.

[20] The moving parties rely upon the Affidavit of Neesa Craven, a law clerk employed by counsel for the moving parties. The gist of Ms. Craven’s Affidavit is that:

a. Jacob is a citizen of Venezuela and resides in Caracas. Relying on Jacob’s Affidavit filed as an Exhibit she states that he has never engaged in business in Canada nor does he have any assets located in Canada;

b. Louis is an American citizen, residing in Florida, where he practices as an attorney. He is the applicant’s attorney and represents the applicant and his business interests in the United States. Relying on Louis’s Affidavit filed as an Exhibit she states that he has never engaged in business in Canada nor does he have any assets located in Canada;

c. Hercules is a Florida company with its principal office located in Florida. Relying again on another of Jacob’s Affidavits filed as an Exhibit, she states that Hercules has no assets in Canada nor has it ever engaged in any business activities in Canada;

d. Plasticos is a Venezuelan company with its principal office located in Venezuela. Relying on Jacob’s third Affidavit attached as an Exhibit, she states that Plasticos has no assets in Canada nor has it ever engaged in any business activities in Canada; and

e. Princesas is a Florida company with its principal office located in Florida. Relying on yet another Affidavit from Jacob attached as an Exhibit, she states that Princesas has no assets in Canada nor has it ever engaged in any business activities in Canada.

[21] The moving parties have provided this court with a number of cases supporting their theory that this court should dissolve the injunction in place because if the parties subject to the injunction were to disobey the court Order, the court could not find them in contempt. As it has been written, “the courts have, however, conscientiously, avoided making orders which cannot be enforced”.[9] The same author writes that “where the defendant has no assets within the jurisdiction, or is an individual who remains outside the jurisdiction, the courts have been more cautious. However, there are circumstances where an injunction will be appropriate….In an Australian case, an injunction was granted against an American defendant to restrain misleading and deceptive conduct on the internet despite potential enforcement problems because of the growing problem of cross-border fraud and because the injunction might assist the plaintiff in securing the assistance of the American authorities to deal with the defendant”.[10]

[22] In further support of their position, the moving parties rely upon a Decision of the Supreme Court of Canada wherein it is stated that Canadian courts will not enforce a penal order, either directly or indirectly with respect to a contempt of court finding.[11] At paragraph 31, the Court also stated that “…equity is about ethics and the prevention of unconscionable conduct”. In the same Decision, the Court speaks about the use of judicial resources[12] in determining whether a matter merits the involvement of the Canadian court.

“In addition to considering alternate means to reach a particular outcome, a court may consider whether the matter merits the involvement of the Canadian court. The receiving court's willingness to extend its judicial resources may depend on the importance of the case compared to the damage the plaintiff would suffer if his or her request were refused…. The appropriateness of using local judicial resources is a factor included in the convenience aspect of the principle of comity. It does not allow judges to determine whether the order is correct, but provides minimal protection for our justice system.”

[23] With respect to the Order against Jacob, the court has been referred by the moving parties to a Decision of the Manitoba Court of Appeal wherein it is expressly stated that the mere presence of a garnishable asset in a jurisdiction does not provide a sufficient basis for a court to take jurisdiction over a party. A bank account is nothing more than a potential garnishable asset.[13] As noted, evidence has been provided regarding Jacob having a bank account at TD Canada Trust in Richmond Hill.

[24] Finally, the moving parties argue that, as determined by the Supreme Court of Canada[14], a court can presumptively take jurisdiction over a person where the person is resident or domiciled in the jurisdiction, has consented to the court’s jurisdiction, carries on business in the jurisdiction, enters a contract in the jurisdiction or commits a tort in the jurisdiction. Within the same Decision, the court also states that the presumptive connecting factors apply in a case concerning a tort. As stated[15].

“The list of presumptive connecting factors proposed here relates to claims in tort and issues associated with such claims. It does not purport to be an inventory of connecting factors covering the conditions for the assumption of jurisdiction over all claims known to the law.”

[25] At paragraph 91 of that Decision, Justice LeBel considered the issue of what other presumptive connecting factors might be identified. He stated:

“As I mentioned above, the list of presumptive connecting factors is not closed. Over time, courts may identify new factors which also presumptively entitle a court to assume jurisdiction. In identifying new presumptive factors, a court should look to connections that give to rise a relationship with the forum that is similar in nature to the ones which resulted from the listed factors. Relevant considerations include:

a. similarity of the connecting factor with the recognized presumptive connecting factors;

b. treatment of the connecting factor in the case law; treatment of the connecting factor in statute law; and

c. treatment of the connecting factor in the private international law of other legal systems with a shared commitment to order, fairness and comity.”

[26] In Knowles v. Lindstrom[16] the court noted that “the statement in Van Breda is made in respect of tort claims. No doubt, it will also apply to other kinds of claims, but it does not necessarily apply to all claims. Support claims are arguably quite different from tort or contract claims in that, absent appropriate support from the former partner, the burden of support may fall on the state where the party seeking support resides. As stressed in Van Breda, the list of presumptive connecting factors depends, in part, on the subject matter of the litigation. It follows that the factors may vary depending on the nature of the claim.”

[27] The respondent, in responding to the Motion, takes exception to the fact that the moving parties are, in essence, seeking to appeal the prior Rulings of Justices Rogers and Rowsell. In his Ruling at paragraph 23, Justice Rowsell noted that Justice Rogers was satisfied that the Mareva injunction was required based on the materials filed in front of her. He was able to review that Order in part with the materials filed by the applicant and the oral submissions tendered on behalf of Jacob. Justice Rowsell, as noted, maintained certain provisions of the prior Order, varied other provisions and added another provision. The respondent argues that by stating that a further review will be required if any of the added respondents choose to file responding materials, Justice Rowsell implicitly referred to the filing of materials commenting on the probative issue before the court, namely, that the added respondents were holding assets in trust on behalf of the applicant. Having filed nothing pertaining to the substantive issue before the court, the respondent maintains that there is nothing for the court to review, as contemplated by Justice Rowsell. Further, as there is no evidence challenging the respondent’s allegations and as she has not been cross-examined, the respondent states that this Motion is in the guise of an Appeal of the prior Orders. The respondent also maintains that the jurisdictional issue was already argued before Justice Rowsell. The respondent notes the reference in his Endorsement where Justice Rowsell makes reference to service under the Hague Convention, which would obviate the need to file material to simply indicate to this court that the added respondents are non-residents.

[28] In response the moving parties argue that Justice Rowsell contemplated a further review upon the filing of further Affidavits and that the prior Decisions did not adjudicate upon the jurisdictional issue. Implicitly, they state, the nature of the connection of the parties to this jurisdiction requires evidence.

[29] The respondent submits that both prior judges directed their minds to assets out of the jurisdiction of the court and the need to preserve those assets for ultimate adjudication by the court on the equalization issue. They also rely upon the respondent’s Answer in which she identifies her rationale in naming the added parties. She alleges that the applicant has indicated an intention not to provide the respondent with any further support and that he is punishing her for ending the marriage.

[30] It has been referenced earlier in this Ruling that the respondent has also commenced litigation in Florida against the applicant and the added respondents for recognition and enforcement of the Orders for injunctive relief granted in this court and for additional claims alleging fraudulent transfers, constructive fraud, unjust enrichment and additional injunctive relief.

[31] The respondent states that in September 2016, various defendants in the Florida proceeding including Princesas brought a Motion to stay the Florida proceedings on the basis that as the respondent was successful in obtaining the Canadian Orders for injunctive relief the Ontario court can reach the very same assets, individuals and entities as the Florida court and the Florida action should therefore be stayed. Notwithstanding the recognition of this court’s jurisdiction in Florida, the moving parties, and, in particular, Princesas continue to challenge the jurisdiction of this court.

[32] In the respondent’s Affidavit dated November 24, 2015 in reference to Hercules, she comments that Articles of Incorporation dated March 2, 2001 reflect the applicant as Director, President and Registered Agent. Similar information is registered for the years 2010, 2013 and 2014. In 2015 and 2016, Jacob is listed as President and Louis as the Registered Agent. In response, Jacob and Louis both remain silent as to the changes in registration. Jacob has sworn an Affidavit dated August 12, 2016 in which he states that he is a citizen of Caracas, Venezuela and that he has never engaged in business in Canada and that he has no assets in Canada. Jacob files a further Affidavit dated June 9, 2016 in which he states that he is the President, sole Officer and sole Director of Hercules and that the corporation has no assets in Canada and, after due inquiry, that the corporation has never engaged in business in Canada. In the respondent’s Affidavit dated March 2, 2017 she provides evidence that in 2013 the applicant liquidated the parties’ joint TD Waterhouse account in the sum of $589,553.83 USD and placed the funds into Jacob’s account at TD Canada Trust in Richmond Hill, Ontario. Again, on September 29, 2015 the applicant transferred $25,000 from a joint account into an account held by Jacob at the Richmond Hill branch. The court was advised that all of those funds are no longer on deposit in the TD bank. The respondent maintains that these funds were wrongfully transferred by the applicant to Jacob in an attempt to defeat the respondent’s ability to enforce an equalization Order once granted to her.

[33] The respondent comments that none of the Affidavits filed by the moving parties address assets or property of any kind in any jurisdiction worldwide in which the applicant may have a direct or indirect legal or beneficial interest as alleged by the respondent and are limited to their statements that the moving parties do not have assets in Canada. They do not address ownership of assets and they do not address any prejudice suffered as a result of the Order either to themselves individually, or affecting the business operations of the corporate respondents even though more than a year had passed since the Orders granting the injunctive relief had been granted.

[34] The respondent states that unless the Orders granting the injunctive relief continues, she will suffer irreparable harm. She maintains, as alleged in both her Answer and numerous Affidavits that the applicant has transferred and/or diverted substantial sums of money. As a resident of Venezuela most of his assets are either in Venezuela or abroad in places unknown. Without preservation of the properties located in Florida, any success in this litigation will be hollow unless there are properties to secure payment of support for herself and the children.

[35] The respondent submits that she has acquired documentation that through Plasticos, the applicant, through the Venezuelan government, converted funds in the amount of $91,570,420 USD between 2004 and 2012 and that through Productos, the applicant converted $51,446,108 USD during the same period. She also states that during the marriage she attended meetings with the applicant and his Canadian bankers wherein he indicated an intention to transfer $50,000,000 USD into Canada. She also provides a recollection of the applicant showing her architectural drawings for which he paid $20,000 USD for use in the renovation of the Golden Beach property owned by Princesas; this property had been listed for sale for $8,500,000 USD.

[36] At the time of separation the applicant allegedly threatened to bankrupt the plastic business to defeat the respondent’s claims.

[37] Counsel for the respondent presented the court with case law in support of the respondent’s position in opposition to the Motion before the court. In Bennett,[17] it was stated that in calculating net family property and the ultimate equalization payment, if any, owing by one party to the other party, the court will take into account the value of foreign owned property, but it has no authority to order its sale. This case, it is submitted, also justifies the respondent in commencing litigation in Florida, where certain property is situated.

[38] The respondent submits that this court has jurisdiction to grant a worldwide Mareva injunction, relying upon the Decision[18] of Justice Pepall (as she then was) wherein the court found a strong prima facie case had been established to grant the requested order as there existed a real risk that assets would be dissipated to defeat satisfaction of a judgment obtained by the plaintiff and that the removal of assets from the jurisdiction had already begun.

[39] Further, the respondent submits, it has been established that once it is accepted that a court has in personam jurisdiction over a person, the fact that its order may affect activities in other jurisdictions is not a bar to the making of an order.[19] The court further stated that “issues of comity and enforceability are concerns that must be taken into account, but they do not result in a simple rule that the activities of non-residents in foreign jurisdictions cannot be affected by orders of Canadian courts”.[20]

[40] In Oesterlund v. Pursglove[21], the court was dealing with a request to enforce a world-wide Mareva injunction granted by a Florida court in a matrimonial matter which contained terms quite similar to the case at bar. One of the orders related to the husband’s personal and corporate assets in Canada. The husband had attorned to the Ontario jurisdiction by commencing matrimonial proceedings in the province. Justice Greer notes (at paragraph 13) that the husband failed to swear and file a responding Affidavit to the wife’s Affidavit filed in support of the Motion. Instead his counsel filed an Affidavit sworn by a law clerk in Florida, annexing documentation from the Florida proceeding thereby precluding the husband from being compelled to attend on a cross-examination of any Affidavit filed in opposition to the wife’s Motion. The court noted that it had the power to grant an interlocutory injunction in a situation it found to be just and convenient. The court examined the strength of the wife’s case and found the granting of the requested order to be just, given the 16-year length of the parties’ marriage, the fact that the Florida court saw fit to grant similar injunctive relief and the fact that the wife indicated that the husband had ceased payment of expenses for the wife and the children. The court found it would be unconscionable, unfair and inequitable to allow the husband to systematically strip his assets out of the reach of the wife to some off-shore jurisdiction that would not obey any court order issued elsewhere.

Analysis

[41] The preamble to the Family Law Act[22]states:

Whereas it is desirable to encourage and strengthen the role of the family; and whereas for that purpose it is necessary to recognize the equal position of spouses as individuals within marriage and to recognize marriage as a form of partnership; and whereas in support of such recognition it is necessary to provide in law for the orderly and equitable settlement of the affairs of the spouses upon the breakdown of the partnership, and to provide for other mutual obligations in family relationships, including the equitable sharing by parents of responsibility for their children;

[42] Property division upon marriage breakdown is governed by Part 1 of the Family Law Act. Subsection 5(7) states as follows:

The purpose of this section is to recognize that child care, household management and financial provision are the joint responsibilities of the spouses and that inherent in the marital relationship there is equal contribution, whether financial or otherwise, by the spouses to the assumption of these responsibilities, entitling each spouse to the equalization of the net family properties, subject only to the equitable considerations set out in subsection (6). R.S.O. 1990, c. F.3, s.5 (7).

[43] The Family Court is governed by the primary objective of the Family Law Rules[23] which creates a partnership between the court, counsels for the parties appearing before the court and the parties themselves to enable the court to deal with cases justly which includes ensuring fairness in the procedure. Implicit in this relationship must be an acknowledgement and acceptance of the preamble to the Family Law Act recited above as well as the purpose of the property provisions of the legislation.

[44] In this case, there is an applicant who commences an Application in Ontario seeking various areas of relief, one of which is that the respondent and her parents hold various valuable pieces of property situated in Ontario, in trust for him. On the other hand, there is a respondent who responds to the Application with claims of her own including claims that the added respondents (specifically the moving parties herein) hold even more valuable pieces of property situated outside of Ontario, in trust for the benefit of the respondent or the respondent and applicant. Until the veracity of these claims are flushed out, the case will linger, both in this jurisdiction and in the Florida courts. That delay undermines the primary objectives of the Family Law Rules.

[45] After a lengthy review of the materials filed with the court including the nine volumes of the Continuing Record, this court is left with a number of concerns. In no particular order they are as follows:

a. The applicant’s father Jacob, allegedly the benefactor of numerous loans to the applicant that financed what can only be described as an extravagant lifestyle for the parties and their children, is silent as to his response to the allegations made by the respondent. With respect to the moving parties’ argument that the mere fact of Jacob having an Ontario bank account is not a sufficient connection to grant jurisdiction over him, it is noted that Jacob offers no explanation regarding his receipt of these funds. This court has no difficulty in distinguishing the case at bar on the basis that the contents of Jacob’s bank account consisted of in excess of $600,000 USD removed by the applicant from joint funds he held with the respondent wife both close to the date of separation and afterwards. The respondent argues that Jacob holds these funds in trust for her and the applicant and in response to this allegation, both the applicant and Jacob maintain a code of silence other than Jacob submitting, in oral argument, that the respondent should have provided better evidence in the form of an Affidavit from the Manager of the TD Canada Trust Bank.

b. The applicant offers no explanation regarding the transfer of these funds. As noted by Justice Rowsell at paragraph 14 of his Decision, the applicant does not deny the truth of the respondent’s allegations but rather states that he does not “acknowledge the truth of any of her allegations”. In his Affidavit dated December 2, 2015, he explains that there are logistical difficulties in providing the response as he was then currently residing in Venezuela. To date the court has not been provided with a more substantive response although evidence suggests that the applicant has been present in this jurisdiction to visit with his children.

c. The only evidence before the court with respect to Hercules is that the applicant was the originating Director, President and Registered Agent in 2001 and continued in these capacities until 2014. In the following two years Jacob is listed as President and Louis as Registered Agent. Jacob does not avail himself of the opportunity to explain how or why he became President of Hercules so as to present to the court a substantive response to the allegations presented to the court by the respondent. He does not provide the source of the inquiry he made regarding the corporation not operating within Canada.

d. The applicant offers no explanation regarding the apparent change in the hierarchy of Hercules. He did not have to hide behind the Affidavit of the law clerk, as did the moving parties, in providing materials to the court as envisioned by Justice Rowsell as he is already a party to the Application and attorned to the jurisdiction of the court.

e. The applicant’s claim to be beneficially entitled to the properties in Ontario is seemingly in conflict with the Statement of Claim initiated by Mr. Avan wherein he claims that the Ontario properties are held in trust for him. It is noted that the applicant has stated that both his father and Mr. Avan wanted to financially assist the applicant and his family, including his in-laws, in having an affluent lifestyle while removing their funds from Venezuela at the same time. This court notes that the particularity of the claims being advanced by Mr. Avan (including his apparent personal knowledge of the family law litigation) were not elaborated upon by the applicant in his earlier Affidavits. This court wonders why Mr. Avan was not requested to file any Affidavit material on behalf of the applicant to support the applicant’s claim of relative impecuniosity raised at various intervals of this litigation. The applicant also offers no explanation as to why he apparently borrowed millions of dollars from Mr. Avan on a handshake between 2010 and 2012 but then enters into a loan agreement in 2016 as evidence of his loan.

f. The moving parties and, in particular, Princesas, as alleged by the respondent, presented an argument to the Florida court that those proceedings should be stayed as the Ontario courts has granted court Orders and yet, in this forum, those Orders continue to be challenged. It is noted that no explanation was provided to this court regarding these disparate arguments.

g. Two Judges were more than satisfied that grounds existed for the granting of a Mareva injunction. Justice Rowsell anticipated a further review upon the filing of further materials. It is submitted that the moving parties could have replied to the substantive issues raised by the respondent without attorning to the jurisdiction of this court but chose not to. They could have stated that they hold no assets in trust for the applicant; they chose not to. The applicant, himself, could have offered sworn explanations regarding the removal of the funds from TD Canada Trust and the apparent transfer of control of Hercules so as to dispel the court from drawing an adverse inference against him; he chose not to.

[46] In Amaral v. Amaral[24], Justice Ferrier drew an adverse inference against the husband due to his failure to provide evidence of a financial transaction that was in dispute for determining the parties’ net family property equalization. A negative inference can be drawn where a party fails to produce any documentary evidence to support its position and which it should have under its control to produce.[25] Such negative inferences have been found to the satisfaction of this court based on the aforementioned concerns.

Determination

[47] As noted by Justice Greer[26], the Supreme Court of Canada, in Pro Swing,[27] stated that they do not want the Canadian justice system to be used in a manner not available in a strictly domestic litigation. In paragraph 30, they say there is a need to “incorporate the very flexibility that infuses equity” in situations such as this. At paragraph 31, the Court also stated that “…equity is about ethics and the prevention of unconscionable conduct”.

[48] The respondent’s allegations remain unanswered, both by the applicant who commenced the litigation in this jurisdiction and by the moving parties who have attempted to avoid attorning to this jurisdiction. There is a very real likelihood that if the prevailing Orders in this jurisdiction were to be set aside, that the assets that are allegedly under the applicant’s control would be removed beyond any jurisdiction that would allow for enforcement of any equalization order obtained by the respondent. That would prevent an orderly and equitable settlement of the affairs of the spouses as contemplated by the preamble to the Family Law Act.

[49] Ultimately a trial judge will be called to adjudicate upon the spousal support claims of the respondent. Assuming that after a 19-year marriage that bore six children, entitlement will not be an issue, the trial judge will make a determination of the means of the parties that are available to generate income. There will be difficulty in assessing the quantum of support if there has been an inequitable result achieved in resolving the equalization of net family property issue. Equity favours maintaining the current orders to enable the court to assist the parties in proceeding to achieve a fair result. It would be inequitable to allow the applicant to proceed with his property claims in this jurisdiction without the court having at its disposal all relevant evidence in support of the respondent’s claims regarding property outside of this jurisdiction.

[50] A major component of the moving parties’ argument is that the court should avoid granting an order that may be unenforceable. As noted by the Supreme Court[28], “a court should not refuse to enforce a foreign non-monetary judgment merely because there is a theoretical possibility that questions may arise in the course of enforcement”.

[51] This court also acknowledges the existence of the parallel proceeding in Florida and the arguments presented in that forum by at least one of the present moving parties that the Florida court should abate the proceeding there as a result of the orders granted in this jurisdiction only to continue to challenge the order granted by Justice Rowsell. In the absence of a response from Princesas or Louis as well as the absence of responses from the applicant and Jacob, as set out above, the court must accept the concerns of the respondent as unchallenged.

[52] This court finds that there would likely be an unconscionable result that would endanger the future well-being of the respondent and her children if the orders of this court were set aside. The respondent has alleged that the moving parties are holding the disputed assets in trust. There is insufficient evidence from the moving parties and the applicant in the form of Affidavits. As the moving parties have tendered no substantive response and have shown no prejudice that has arisen in the 18 months since the granting of Justice Rowsell’s Order and as that Order remains a temporary Order pending further developments in the litigation including disclosure and responses by the moving parties to some of the concerns expressed by this court, that Order must continue. The real and substantial connection of the disputed assets currently held by the moving parties as trustees can be found in the ongoing litigation between the applicant husband and the respondent wife over the equalization of net family property. That issue cannot be resolved unless one court assumes jurisdiction. To that end, it was the applicant who commenced his application in this court. Indeed, if the Order of Justice Rowsell was to be set aside and if the respondent is correct that the applicant has been attempting to remove assets from the equalization of net property determination, then the court would be sending a tacit message to all individuals contemplating separation that there is a procedure by which one can avoid the operation of the applicable law by simply stripping oneself of assets and placing them beyond the jurisdiction of this court. That is a message that this court will not condone.

[53] The Motion is dismissed.

Costs

[54] If the parties cannot otherwise agree on costs, I will accept written submissions no longer than three double-spaced pages plus Bills of Costs with dockets and case law. The respondent shall serve her submissions by August 21, 2017 and the moving parties shall respond by September 5, 2017. The respondent shall be given 10 days to reply, if so inclined, by September 15, 2017.

Justice R. P. Kaufman

Date: July 31, 2017

[1] Courts of Justice Act, R.S.O. 1990, c. C.43

[2] Rules of Civil Procedure, R.R.O. 1990, Reg. 194

[3] Family Law Rules, O. Reg. 114/99

[4] Farah v. Sauvageau Holdings Inc., 2011 ONSC 1819 at para. 110; Chitel v. Rothbart (1982), 1982 1956 (ON CA), 39 O.R. (2d) 513 (Ont. C.A.).

[5] 2015 ONSC 7706, paragraph 29.

[6] Ibid, paragraph 23.

[7] Abitbol v. Benarroch, Las Princesas Corp., a Florida corporation, David Avan et al, Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida. General Jurisdiction Division Case No.: 15-27539 CA 01 (27) per Rodriguez, Circuit Court Judge.

[8] File CV-16-551020

[9] Robert J. Sharpe, Injunctions and Specific Performance, Loose leaf edition. Canada Law Book, November 2012 at page 1-60 to 1-61.

[10] Ibid, 1-63.

[11] Pro Swing Inc. v. ELTA Golf Inc., 2006 CarswellOnt 7203.

[12] Ibid, para. 46 and 48.

[13] Tortel Communication Inc. v. Suntel Inc., 1994 CarswellMan 173 at para. 18.

[14] Van Breda v. Village Resort Ltd., 2012 CarswellOnt 4288 at paras. 79, 86 or 90.

[15] Ibid, para. 85.

[16] 2014 ONCA 116, para. 38.

[17] (2001) 28114 (Ont. S.C.J.) per Campbell, J. See also Potter v Boston, 2014 ONSC 2361 (S.C.J. Div.Ct.) per Healey, J.

[18] Innovative Marketing Inc. v. D’Souza, 2007 5529 (S.C.J.) pp. 2&7.

[19] Equustek Solutions v. Jack, 2015 BCCA 265, [2015] B.C.J. No. 1193 (B.C.C.A.). The court noted that courts may have in personam jurisdiction over non-residents in a variety of situations.

[20] Ibid, para. 88.

[21] [2014] O.J. No. 2313 (Ont. S.C.J.).

[22] R.S.O. 1990, c. F.3 as amended

[23] O. Reg. 114/99 as amended

[24] Amaral v. Amaral, 1993 16129 (ON SC), 1993 CarswellOnt 372 (O.C.J.Gen.Div.), paras. 11-12

[25] 1664550 Ontario Inc. v. 1240393 Ontario Ltd., 2011 CarswellOnt 14713 (S.C.J.), para. 57

[26] Op. Cit. footnote 21

[27] Op. Cit., footnote 11,

[28] Ibid, paragraph 98