Overview

[1] This is a motion for summary judgment.

[2] The plaintiff has sued for enforcement of a separation agreement and collateral relief including damages. The defendant says the claim should be dismissed.

[3] The test on a motion for summary judgment is well known. Summary judgment shall be granted if the court is satisfied that there are no disputes of material fact raising a genuine issue requiring a trial. The question is whether the presiding judge can, in the context of a motion, make a fair and just adjudication of the case. The process must be sufficient to allow the judge to make the necessary findings of fact.

[4] When determining whether there is a genuine issue for trial, the judge first considers the evidence on the motion without exercising the expanded fact-finding powers now available. If there appears to be a genuine issue for trial, then the court should go on to determine whether a trial might still be avoided, using the new fact-finding powers, by:

(1) weighing the evidence;

(2) evaluating credibility; or

(3) drawing reasonable inferences.

[5] Ultimately, the evidence on the motion must be sufficient to enable the judge to be confident that he or she can fairly and justly resolve the issue without a trial.

Background

[6] In brief, the parties were married in Kiev, Ukraine in 1983. They left Ukraine in for the Netherlands. Then they moved to Canada. They separated in June 2010. With the benefit of experience matrimonial counsel they negotiated and signed a separation agreement in June 2011. They were divorced by order of the Superior Court of Justice made in October 2011.

[7] The separation agreement dealt with Ukraine property, a small apartment in Kiev (the Property). The respondent wife agreed to transfer her interest in the Property (title was held in her name) for $10,000. The applicant husband paid the money. Respondent wife was also to provide applicant husband with the original title documentation for the Property.

[8] Following the execution of the separation agreement there ensued a period of time, until 2014, when RW sent documents to AH, purporting to effect the transfer of the Property to AH. Throughout, RW says she was, in good faith, trying to provide AH with the means by which the Property could be transferred to him. This was initially by way of a power of attorney, then by deed of gift. It took several years before the original title documentation was finally sent to AH.

[9] AH says the purported assistance and draft documents for the transfer of the Property by RW were not good faith attempts to perform her obligations under the separation agreement. They were, rather, intentionally defective efforts taken to frustrate the transfer of the Property to him.

[10] Eventually, AH sought relief in the Ukraine court. He sought transfer of the title to the Property. RW became actively involved in the Ukraine court proceedings. She opposed AH’s application. Proceedings in the Ukraine court appear to have resulted in an order that AH and RW own the Property jointly in equal proportions.

[11] AH also obtained a dissolution of his marriage to RW under Ukraine law. RW successfully applied to the Ukraine court to set aside this order on the basis that she had not received notice. Proceedings in the Ukraine court appear to have resulted in the Ukraine court not recognizing the Canadian divorce order as affecting a divorce under Ukranian law. There may be proceedings still extant in Ukraine regarding the dissolution of the Ukraine marriage; it is not entirely clear.

[12] The end product of all of this is that, at present, six years after the separation agreement, AH is apparently not divorced under Ukraine law and RW still owns a 50% interest in the Property.

[13] AH commenced an action in Ontario in 2015. In essence, AH’s action claims:

(1) that RW breached the separation agreement by failing to transfer the Property. He seeks an order of specific performance for the transfer and damages for breach of the agreement to transfer the Property. AH advances two theories of damages:

(a) having title to the Property was critically important to his import business in Ukraine. RW’s failure to transfer title caused losses to AH’s business, for which he seeks consequential damages; and

(b) failure to transfer the Property to him meant he could not rent the Property and generate income. He seeks foregone rent from 2011 to the present;

(2) that RW has frustrated AH’s efforts to obtain a dissolution of their marriage in Ukraine, even though she consented to the divorce in Canada. This has had the effect of frustrating AH’s ability to remarry. It is unclear what relief the plaintiff seeks in this regard from the Ontario courts, other than punitive damages.

[14] It seems to me the two key issues raised in the AH’s claim are:

(1) whether RW breached the separation agreement by failing to transfer the Property to AH; and

(2) whether RW can be liable in damages for interfering with AH’s attempts to obtain a dissolution of their marriage under Ukraine law, or in some way be required to enable (or not oppose) the dissolution of their marriage in Ukraine.

[15] The presentation of the issues and the evidence in this case is hampered by several factors:

(c) the vague, prolix nature of the pleadings, which frequently wander into factual allegations and responses unrelated to any actual claim;

(d) the filing of vast quantities of irrelevant or only marginally relevant “evidence” inserted solely for colour or to disparage the other party; and

(e) the absence of independent expert evidence on matters of Ukrainian law and procedure relating to:

(i) the law of transfer of property;

(ii) the recognition of a Canadian divorce judgment in the Ukraine;

(iii) enforcement of a separation agreement made in Canada;

(iv) the means by which a couple divorced in Canada can become divorced in the Ukraine;

(v) the Ukrainian system of property division on divorce; and

(vi) the need for ownership of the registered head office of a corporation in order to carry on business and the means by which a Ukrainian corporation can change its registered business address; and

(f) the lack of independent, certified translations of many of the Ukraine documents, including some of the decisions of the Ukraine court.

I will return to my concern about some of these issues later in these Reasons.

[16] RW argues AH cannot possibly succeed on these claims. She relies on the expiry of the two year limitation period and res judicata, issue estoppel and abuse of process. RW also seeks an order declaring AH a vexatious litigant.

Transfer of Property

[17] The separation agreement unambiguously requires RW to transfer the Property to AH. The evidence is that she did eventually deliver, albeit two years late, the title documentation.

[18] RW argues that she took all reasonable steps to facilitate the transfer of the Property to AH. She says he failed to avail himself of the powers of attorney and deeds of gift that she proposed.

[19] AH says these documents were defective, intentionally defective. In any event, when AH finally took matters into his own hands and sought the assistance of the Ukraine courts, RW actively intervened and opposed the transfer. She argued, successfully, that the evidence of the separation agreement could not be accepted as binding in the Ukraine court. She argued that she was the 100% owner of the Property.

[20] The Ukraine court appears to have concluded that the Property was subject to Ukraine matrimonial property division laws and that they each held a 50% interest in the Property. Both parties appealed – with each party seeking a decision making them the exclusive owner. The appeal was dismissed on the Property-related issues. The decision of the court of first instance was upheld.

[21] In my view, it cannot be so difficult to transfer ownership of a small apartment to AH. One of these parties, or perhaps both of them, has clearly engaged in mischief in relation to the transfer of the Property. It is impossible to conclude, on the present record however, who is responsible for frustrating the Property transfer. For example, RW’s conduct in the Ukrainian court proceedings is completely inconsistent with her stated intention to bring about the transfer of the Property to AH. Her explanation for her contradictory behaviour is vague, evasive and appears on its face nonsensical.

[22] Similarly, it is impossible to determine on the present record whether AH’s claim that the powers of attorney and deed of gift were not appropriate means of transferring the Property, is true. Only viva voce evidence with effective cross-examination, and proper evidence on Ukraine law, is likely to get to the bottom of these seeming conundrums.

[23] It is likewise impossible on the present record to make any determination about limitations issues. There is no date prescribed in the separation agreement for when the Property transfer was to have taken place. AH has put forward evidence that it was not until RW actively opposed the Property transfer in the Ukraine court proceedings in 2014 that he finally had reason to know, for limitation purposes, that RW was in breach of the separation agreement. The Ontario claim was commenced within two years of that event. Whether a limitation period was or was not missed is a disputed issue of fact entirely bound up in the disputed evidence about the breach of the separation agreement and can only be resolved at the trial.

[24] I do not think the principles of res judicata etc. are applicable here. The Ukraine court decisions are what they are. The Ontario court has no jurisdiction in the Ukraine. But, RW resides in Ontario. The Ontario court has in personam jurisdiction over her. The separation agreement was made in Ontario, in settlement of a matrimonial dispute in Ontario.

[25] I do not regard the Ukraine court proceedings as dispositive of AH’s rights to enforcement of, or damages for breach of, the Ontario separation agreement, at least certainly not at this stage.

[26] I conclude that the issues of breach of the Property transfer obligation and possible damages cannot justly and fairly be decided on a motion. For these reasons, the motion for summary judgment on the Property transfer claim is dismissed.

Divorce/Dissolution in Ukraine

[27] The Ukraine court appears to have revoked the marriage dissolution initially granted to AH in Ukraine. This followed RW’s intervention in that proceeding to oppose it, in part on the basis that she had not received proper notice. It also appears the Ukraine court has not recognize the Ontario divorce order. These are matters of Ukraine law, over which Ontario courts have no jurisdiction or authority. While there is in personam jurisdiction over the parties in Ontario, there is no “claim” made against RW recognizable in law in connection with these matters.

[28] The separation agreement does not deal with divorce. There was, I gather, a consent divorce order issued in 2011 in Ontario. There is no claim for an injunction to prohibit RW from interfering in the AH’s attempts to ratify their divorce in Ukraine. The only damages referred to in connection with this issue are punitive damages. Punitive damages are not standalone damages. They attach only to an independent, recognized cause of action, where the defendant’s conduct is sufficiently outrageous or otherwise warrants sanction. There is no cause of action in connection with Ukraine divorce proceedings pleaded. I have grave doubts such claim even exists.

[29] I therefore grant summary judgment on the Ukraine “divorce” or marriage “dissolution”-related claims, simply because they either involve matters subject only to the jurisdiction of the Ukrainian courts or plead no cause of action known to Ontario law.

Vexatious Litigant

[30] RW does not come even close to establishing a basis for a declaration that AH is a vexatious litigant. The offending litigation relied on is the Ukrainian court proceedings. I do not think Ukrainian court proceedings qualify under s. 140 of the Courts of Justice Act. Even if they did, it appears that RW voluntarily chose to become actively involved in opposing AH’s Ukraine proceedings in a manner that seems, on its face at least, contrary to her stated intentions and the language of the separation agreement. She did so for reasons that remain far from clear.

[31] Proceedings for an order declaring someone a vexatious litigant must also be commenced by way of originating process. That was not done here.

[32] The motion for an order declaring AH a vexatious litigant is dismissed.

Trial Preparation and Management

[33] Having dismissed the motion for summary judgment on the main issue, I am obliged to consider future steps to bring this matter to a just, expeditious conclusion. There is no reason why this case cannot proceed to trial quickly and efficiently. I therefore direct the parties to develop a mutual trial preparation and management plan.

[34] The parties shall identify, specifically, the issues for trial, who will testify on these issues and what documents will be tendered on each of those issues. To the extent the parties do not agree on a step or procedure, they shall at least narrow the issue and highlight the specific nature of the controversy. Disputed issues shall be resolved at a trial management conference, to be booked following completion of the draft trial preparation and management plan.

[35] The extravagant excesses in the competing affidavit war that has taken place to date must be excised from the trial process. These affidavits are filled with irrelevant nonsense. Only evidence relating to the issues in dispute should be admitted. For example, there is a great deal of evidence advanced by both parties about the dissolution of the Yuti Foundation in Liechtenstein. When pressed in oral argument, Mr. Viater conceded that AH is not in fact asserting any monetary claim in respect of any distributions from that Foundation. The entire Yuti Foundation episode is simply irrelevant to the resolution of the issues that are in dispute. Various references to this issue were included in the affidavit wars for no purpose other than to disparage the character of the other party.

[36] In my view, subject to the trial judge, because the intentions, motives and credibility of the parties are central to the disposition of the main issue, their evidence must be given viva voce; that is, their evidence in chief and cross-examination should be in person.

[37] Properly certified independent translations by qualified experts must be provided for all Ukrainian language documents on which either party seeks to rely at trial. To the extent either party intends to rely on Ukraine law or procedure, it must be proved, again by qualified, independent legal experts. It may well be, however, that evidence of this nature need not be presented viva voce.

[38] AH has advanced a claim for damages for breach of contract or, alternatively, unjust enrichment. It is for the plaintiff, obviously, to prove his damages. The trial management plan must include a timetable for the filing of all documents and any expert reports, from both sides, on the damages issue.

Costs

[39] As the motion for summary judgment on the main point was dismissed, AH is entitled to his costs. The default is to partial indemnity, in my view. If either party seeks any different disposition, they may submit short briefs. AH shall file a submission, not to exceed two typed double-spaced pages together with a bill of costs, within 10 days of the release of these Reasons. RW may provide any responding or different submission, subject to the same page limit, within a further 10 days.

Penny J.

Date: December 11, 2017

Kostyuk v. Kostyuk, 2017 ONSC 7369

Case Summary

Overview

Background

Transfer of Property

Divorce/Dissolution in Ukraine

Vexatious Litigant

Trial Preparation and Management

Costs

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Issues