Court File and Parties

COURT FILE NO.: CV-96-88 DATE: 2019-03-14

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Dino Lepre, Plaintiff A N D: Marie Jean Hynds (Deceased) and Laurie Ann Hynds, Defendants

BEFORE: The Honourable Justice L. C. Sheard

COUNSEL: P. Capone, for the Plaintiff No one appearing on behalf of the Estate of Marie Jean Hynds S. Nash, for the Defendant Laurie Ann Hynds

HEARD: at Cayuga on February 20, 2019

E N D O R S E M E N T

Overview

1There were two motions before me. The first is brought by the defendant, Laurie Ann Hynds (“Hynds”). Hynds seeks various relief starting with a declaration that the plaintiff (“Lepre”) is in contempt of the order of Lofchik J. issued August 3, 1999 (the “Lofchik Order”), followed by an order varying the Lofchik Order to allow her to “unilaterally take all steps necessary” to deal with property owned jointly by Hynds and Lepre, described as the Powassan bush lot (“Powassan”).

2Powassan consists of lots 28 and 29, 100 acres and 74 acres, respectively, located in the Township of Chisholm, south of North Bay.

3In oral submissions, Hynds asked the Court to make whatever order might be needed to effect a sale of Powassan, which would then lead to a distribution of its net sale proceeds.

4The second motion before me is brought by Lepre. He opposes the relief sought by Hynds and asks instead that Powassan be partitioned pursuant to the Partition Act [1] or, alternatively, that Powassan be sold and the net sale proceeds divided, after taking into account monies spent and improvements made to Powassan by Lepre.

5At the hearing, the parties agreed that if the relief sought by Hynds was not granted, Lepre would be permitted to pursue his counter-motion for the partition and/or sale of Powassan. The parties asked that the Court waive compliance with the procedure set out in the Partition Act, which contemplates the bringing of an action or application, and to treat Lepre’s motion as if it had been commenced by Application.

6For the reasons set out below, I do not grant the relief sought by Hynds. I do grant the alternate relief agreed to by the parties and order that Lepre’s motion may proceed as if it had been brought by way of application under the Partition Act.

7The parties may contact the Trial Co-ordinator at Cayuga to schedule the hearing of Lepre’s motion before me. If the parties require directions respecting the materials to be used on the hearing or any related issue, they may also ask to schedule a brief conference with me, which may be by telephone if requested.

Background

8Neither party sought to cross-examine on the affidavits put forth on this motion. While there may be gaps in the evidence, for the most part, the parties agree on the basic facts.

9In 1996 Lepre sued his then common-law spouse, Marie Jean Hynds (“MJH”), now deceased, and her daughter, Hynds, concerning the ownership of three parcels of land purchased in the parties’ joint names. Lepre’s action was settled by way of Minutes of Settlement, which were incorporated, on consent, into the Lofchik Order.

10Pursuant to the Lofchik Order, certain properties, including Powassan, were to be listed for sale. The properties set out at paragraphs 1(a) and (b) of the Lofchik Order were sold and the proceeds distributed amongst the parties. Powassan was not sold.

11Pursuant to the Lofchik Order, Powassan was to be listed for sale for three months. The starting price was to be $38,000.00, reduced monthly by $1,000.00, for each month it remained unsold. If Powassan did not sell in three months, the majority of the parties were to agree on a new listing agent, with whom Powassan would be listed for a second three-month period. Again, the listing price was to drop $1,000.00 per month for each month Powassan remained unsold.

12Paragraph 6 of the Lofchik Order provided that if Powassan did not sell in the second three-month period, it was to be sold at a public auction, by an auctioneer chosen by the majority of the parties.

13The Lofchik Order does not specify who is to have carriage of the sale nor does it impose any obligations on any particular party to list Powassan or to arrange for its sale by way of public auction.

14On August 27, 2009, the parties signed a listing agreement for Powassan [2] at a listing price of $49,900.00, not the $38,000.00 required by the Lofchik Order. I have no evidence as to whether the list price was reduced monthly as contemplated by the Lofchik Order. In her affidavit, Hynds asserts that when the initial listing agreement expired, Lepre refused to re-list Powassan. However, it is unclear why his consent was needed, given that control was given to the majority in the Lofchik Order and Hynds and MJH would have formed that majority.

15Hynds did not offer any details or evidence that she and MJH sought to re-list Powassan with another agent in the three months after the first listing agreement expired. Hynds does not explain why she and MJH did not seek to enforce the Lofchik Order at that time. As will be seen below, some five years later, Hynds and MJH did make some effort to list Powassan. Until this motion, brought some 19 years after the issuance of the Lofchik Order, none of the parties sought to have Powassan sold by auction.

16In his affidavit, Lepre responds that when Powassan did not sell, none of the parties made any effort to comply with paragraph 6 of the Lofchik Order that required Powassan to be sold by auction. Lepre explains that selling Powassan proved to be a very difficult task, which is why no effort was made to enforce the auction sale provisions of the Lofchik Order: all parties believed that “the chances of an auction sale to retrieve reasonable value was slim.”

17Hynds’ evidence is that in June 2004, close to five years after the original listing agreement, she contacted a real estate agent and asked that Powassan be again listed for sale. Hynds and MJH were represented by solicitor James Baxter (“Baxter”), who had acted for Hynds and MJH throughout the litigation with Lepre. Baxter witnessed his clients’ signatures on the Minutes of Settlement upon which the Lofchik Order was based.

18Hynds’ evidence is that in June 2004, Lepre refused to re-list Powassan. That is supported by the correspondence dated June 30, 2004 from Baxter to Lepre, in which Baxter stated that the matter would be brought back to court if Lepre did not cooperate. Baxter’s next letter was dated October 5, 2004, sent to Lepre’s then lawyer, Bohdan Bodnaruk (“Bodnaruk”). Baxter again referenced the Lofchik Order and that Hynds and MJH would be advised to bring contempt proceedings.

19Nothing happened for two years.

20By letter dated October 10, 2006, Bodnaruk replied to Baxter’s 2004 correspondence. Bodnaruk made no reference to the Lofchik Order but advised that Lepre would be willing to buy out the interests of Hynds and MJH for $14,000.00. In his reply of October 12, 2006, Baxter advised that Lepre would need to obtain an appraisal of Powassan and to pay market value for the interests of Hynds and MJH.

21Bodnaruk sent two letters dated December 1, 2006: one included the requested appraisal, that placed the market value of Powassan at $39,150.00 and the second contained Lepre’s offer. Bodnaruk followed up with Baxter on June 4, 2007. By letter of June 6, 2007, more than seven months after Bodnaruk’s letter, Baxter replied that his clients wanted Powassan to be listed for sale. Bodnaruk replied on June 20, 2007 advising that Lepre’s offer remained open to July 5, 2007 but that after that date, Hynds and MJH would have to pay their share of the $9,417.74 in property taxes, previously paid by Lepre.

22Thereafter, there was no communication between the parties for close to 11 years. MJH died on March 27, 2018 and by letter of April 20, 2018, Hynds’ new lawyer wrote to Lepre. The letter advised Lepre that a survivorship application for Powassan was needed as a result of the death of MHJ and that Hynds would consider selling her (now) one-half interest in Powassan. Hynds sought payment equal to one-half the appraised value, and that Lepre would be responsible for payment of any taxes or encumbrances.

23Lepre’s then lawyer responded on June 12, 2018. The letter advised that Lepre would agree to buy out Hynds’ interest for $20,000.00; had paid all the taxes on Powassan; and had built a home on Powassan where Lepre was residing.

24No agreement was reached. Hynds stated that she would bring this motion and Lepre stated he would seek the partition of the two lots that comprise Powassan. The motions, originally returnable in September and November 2018 were ultimately adjourned to be heard together on February 2019.

25There was time only to hear Hynds’ motion. Lepre’s motion was adjourned to await the outcome of Hynds’ motion.

Positions of the Parties

26Hynds asserts that Lepre has breached the Lofchik Order and should be found in contempt and that Hynds should be entitled to take full control over the sale of Powassan. She explains that her (and MJH’s) inaction between 2007 and 2018 was due to a lack of financial resources to hire a lawyer. No financial information was offered to support Hynds’ statement. Hynds further asserts that Lepre has “unfairly received a benefit from residing” at Powassan “solely to her detriment.”

27Lepre submits that the parties never abided by the Lofchik Order with respect to Powassan. He points out that the listing agreement, signed on August 27, 1999, only weeks after the Lofchik Order, was for $49,900.00, not the stipulated $38,000.00. As set out above, the undisputed evidence is that, aside from some intermittent negotiation for Lepre’s possible buy-out of the defendants’ interest in Powassan, none of the parties followed the Lofchik Order or took any steps to have it enforced.

Actions of Lepre

28Lepre acknowledges that he did not agree to re-list Powassan in 2004, but points out that the Lofchik Order did not require him to do so. Lepre also asks the Court to note that, until the death of MJH, MJH and Hynds formed a majority and, pursuant to the Lofchik Order, had the power to have Powassan re-listed for sale or sold by auction.

29Lepre further asserts that Hynds and MJH took no interest in Powassan: they did nothing to ensure that property taxes were paid although they knew that property taxes were payable, and took no steps to ensure there was compliance with the Ministry of Natural Resources and Forestry (“MNRF”) requirements for the management of Powassan, which consists of bush lots.

30Lepre asserts that he, alone, paid the property taxes owing on Powassan from 1999 to 2017 in the total amount of $23,762.41, without which Powassan would have been sold on a tax sale. Lepre states that he also ensured that Powassan was in compliance with the obligations and regulations imposed by the MNRF. To do so, Lepre asserts that, at his own expense, he arranged Powassan to be cleared of its dead wood and for the services of arborists to ensure that the trees were properly planted.

Lepre Builds a House

31Lepre states that he determined to obtain some benefit from the monies he paid for property taxes and bush lot maintenance and so he built himself a home on Powassan. Lepre states that he applied for a construction permit in 2008, although the evidence before me on the motion suggests that he had applied for a building permit in 2004 [3]. Also, it appears that the house Lepre built may be larger than permitted by the building permit. There is evidence that Lepre also built a garage, a second home, and a septic system on Powassan. Full details of these improvements were not provided, nor are they necessary for me to determine Hynds’ motion, but will be relevant to the determination of the Partition Act portion of this proceeding.

32In his affidavit, Lepre asserts that he built three roads on Powassan and that the roads and his house have both increased Powassan’s value. In support of that assertion, Lepre has provided a copy of an opinion of value from RE/MAX Legend Real Estate Inc., Brokerage, dated as of November 8, 2018.

33In view of his investment in Powassan and that it has now become his home, Lepre does not want it to be sold. As an alternative, if Powassan must be sold, Lepre seeks an accounting and compensation for his investments in it.

Issues

34There are three issues to be decided:

1. Should Lepre be held in contempt of the Lofchik Order?
2. Should Hynds be permitted to control the sale of Powassan?
3. If the answers to 1) and 2), above, are no, should Lepre be permitted to proceed with his motion for the partition of Powassan?

Issue 1: Should Lepre be held in contempt of the Lofchik Order?

The Law

35The parties agree that the three elements of civil contempt are as follows:

1. the order alleged to have been breached must state clearly and unequivocally what should and should not be done;
2. the party alleged to have breached the order must have had actual knowledge of it; and
3. the party allegedly in breach must have intentionally done the action that the order prohibits or intentionally failed to do the act that the order compels (see Carey v. Laiken [2015] 2 SCR; Greenberg v. Nowak 2016 ONCA 949; and Business Development Bank of Canada v. Cavalon Inc., 2017 ONCA 663).

36The Lofchik Order was made in 1999, yet none of the parties acted in accordance with its terms with respect to Powassan. Further, despite knowing that Powassan remained unsold, until she brought this motion in the fall of 2018, Hynds took no steps to act upon or enforce the Lofchik Order for over 19 years. Thirdly, the sporadic communication between the parties’ lawyers between 1999 and 2018 supports a finding that none of the parties was interested in acting upon or following the Lofchik Order and, instead, were prepared to negotiate other ways to divide their ownership interests.

37Given the facts, it would be impossible to find Lepre in contempt of the Lofchik Order without also finding Hynds and MJH in contempt: they all breached the Lofchik Order intentionally.

38Further, Lepre’s refusal to list Powassan in 2004 cannot be seen as a breach of the Lofchik Order: its terms did not contemplate nor require Lepre to consent to list Powassan five years later. Even if the Lofchik Order were still enforceable at that date, by its terms, Hynds and MJH had the power to sell Powassan by auction but made no effort to do so.

39I find that, in the facts of this case, the passage of time has rendered the Lofchik Order unenforceable. Also, as early as 2006, it would appear that the terms of the Lofchik Order relating to Powassan were no longer consistent with the wishes of the parties: the Lofchik Order requires Powassan to be listed for $38,000.00. In December 2006, Lepre offered to pay Hynds and MJH $24,000.00. They turned down his offer. Taking into account Hynds’ and MJH’s responsibility to pay two-thirds of the $9,417.74 property taxes paid by Lepre on Powassan ($6,278.49) and without any deduction for real estate commission (the listing agreement of August 27, 1999 demanded a 10% commission), Lepre’s offer represented an amount in excess of what Hynds and MJH would have received had Powassan been sold for the $38,000.00 contemplated by the Lofchik Order.

40Based on the evidence before me, I cannot conclude that any of the parties was willing to or did abide by the Lofchik Order and could not find Lepre in contempt of it without making a similar finding in respect of Hynds and MJH.

41As stated in Carey v. Laiken, the court’s contempt power is discretionary and it should not be used to obtain compliance with court orders (at para. 36). Further, “a judge may properly exercise his or her discretion to decline to impose a contempt finding where it would work an injustice in the circumstances of the case.” (at para. 37)

42Given the facts in this case, the 19-year delay in seeking to enforce the Lofchik Order, in and of itself, would be sufficient for me to conclude that finding Lepre, or any of the parties, in contempt, would work an injustice.

43More important, despite that Hynds seeks to persuade this Court that Lepre is in contempt of the Lofchik Order, she herself does not wish to enforce its terms. Rather, Hynds seeks an order that is completely different from the agreement reached among the parties and upon which the Lofchik Order was based.

44It is apparent to all parties, and to the Court, that the unfulfilled portions of the Lofchik Order are no longer meaningful or in keeping with the agreement among the parties.

Issue 2: Should Hynds be permitted to control the sale of Powassan?

45Lepre submits that to allow Hynds to oversee the sale of Powassan would permit her to unilaterally vary the terms of the Lofchik Order. He submits that the court has no jurisdiction to vary the terms of the consent order. (See Verge Insurance Brokers Limited v. Richard Sherk, 2015 ONSC 4044 at para. 70).

46I accept Lepre’s submissions. A court should not interfere with the bargain made by the parties. Furthermore, for the reasons given, the Lofchik Order ought not to be enforced at all: if parties are not able to agree on a new bargain, then the matter must be decided by the Court.

47For almost 19 years Hynds and MJH did nothing to ensure that property taxes were paid on Powassan: they left the management and carriage of Powassan to Lepre, despite knowing of those obligations. Moreover, they took no or insufficient steps to see to the sale of Powassan, despite knowing that it was their right.

48I find that there would be massive unfairness to Lepre to exclude him from the sale, should a sale be the only way to fairly divide and distribute the parties’ ownership interests in Powassan, given that it was through his efforts, at the least by paying property taxes, that Powassan was not sold to satisfy that obligation.

Issue 3: If the answers to 1) and 2), above, are no, should Lepre be permitted to proceed with his motion for partition of Powassan?

49For the reasons stated, the answer to this is yes.

Disposition

50As set out above, I do not find the plaintiff to be in contempt of the Lofchik Order and dismiss Hynds’ motion. Similarly, the relief sought by Hynds to have sole carriage of the sale of Powassan is also dismissed.

51Having found that the Lofchik Order ought not to be enforced, it is premature to determine how and by whom a division of the ownership interests in Powassan should be resolved. That is the question to be addressed in Lepre’s Partition Act motion.

52If the parties are unable to agree to how Lepre’s Partition Act motion ought to proceed, including the delivery of further materials and facta, if required, the parties may arrange a brief hearing via teleconference before me through the Trial Co-ordinator.

Costs

53Notwithstanding that the relief sought by Hynds has not been granted, I conclude that it would be appropriate for the issue of costs to await the outcome of Lepre’s Partition Act motion.

Sheard J. DATE: March 14, 2019

Footnotes:

[1] R.S.O. 1990, c. P.4 [2] Affidavit of Laurie Ann Hynds, Exhibit I, Motion Record, Tab 2(i) [3] Second Supplementary Motion Record of the Defendant, Affidavit of Deepak Iyer sworn February 15, Exhibit B